Banking Without Borders
00:01:09 · Jan Watermann
[00:01:09] S1: Yeah, Jonny, I think they're surprisingly good. Okay. Not market leading, but decent at least. So you're getting an APR range from 6 to 9 to 29.3%. Obviously, 6.9 is the representative APR, so that's the APR that at least 51% of customers would need to be getting in order for them to be allowed to advertise it. And that's on a on an amount between 7.5000 to 25,000 pounds. Typically, the if you're taking out less than 7.500, you'd not be getting this 6.9% APR, but a higher APR, which is yeah, I don't want to say predatory, but you you see what I mean, right? You should not be punished to take out less money. Uh, but that's my personal opinion. We'll talk about that later. I think besides that, uh, let's talk about the terms really quick. So you have uh between one and five years to pay back that loan. Um, you can choose. If you want to pay it off early, you're not being penalized, which is a good thing. Um, a lot of banks penalize you for paying back early. You know, you can definitely claim this is probably one of the easiest loans to take out. It's super seamless if you take a look at your app, if it's already available for you. Within the European Union, it has been available for yeah, quite some time. I'd say many years probably. Super easy, just within a few fingertips, you will be able to figure out whether you're you qualify for the loan, um, you get the the money, I think instantly, even if they approve you. Um, so that's a great thing. Yeah, but it also makes it shockingly easy, actually. It's it's kind of shocking, right? Um, because uh taking out a loan is is a thing that you should probably prepare for. Um that should not be done lighthearted. You have to think about the decision, you have to think about all the consequences that come with that. I'm not quite sure whether this is a good thing or not that you can take out the loan with Revolut within minutes, essentially.
00:02:52 · Jonny Pease, Jan Watermann
[00:02:52] S0: So you've got access to taking it, because you said about it being available in the European Union for a while. Do you actually have access to Revolut loans within your app? [00:02:59] S1: I do actually, yeah, Jonny. Um and we can show that on the screen really quick. [00:03:03] S0: This episode is brought to you by XTB, who are giving you an opportunity to receive five free shares when you open an account, deposit at least £50, and make a qualifying trade via the link below. So I've been using XTB for a while now, and there are very few fees. And the only thing you pay for is half a percent on currency conversion if you're buying foreign stocks, which is pretty competitive. The investment plans feature is also one of my favorites. So you go in, pick either a ready-made plan, a sector plan, or build your own. And the sector plans are great if you're thinking long term. Say you want to invest in something sustainable, you can set up a renewable energy plan, then either invest in it as a one-off or set up a recurring amount. So your pound cost averaging over time without having to think about it. [00:03:49] S1: For me, Jonny, the standout feature is fractional shares. If you want to invest into big US tech giants or larger UK companies, you don't need hundreds of pounds to buy a full share. You can build your portfolio with fractional shares from just one pound, which makes getting into these individual stocks obviously way more accessible. And you can also do that tax-free inside their stocks and share sizer.
00:03:49 · Jan Watermann, Jonny Pease
[00:03:49] S1: For me, Jonny, the standout feature is fractional shares. If you want to invest into big US tech giants or larger UK companies, you don't need hundreds of pounds to buy a full share. You can build your portfolio with fractional shares from just one pound, which makes getting into these individual stocks obviously way more accessible. And you can also do that tax-free inside their stocks and share sizer. [00:04:07] S0: So if you want to check out XTB and get five free shares of the Vanguard FTSE Global All Cap ETF, open an account using our link and the code BWB1. You have to deposit at least £50 by any share or ETF within seven days of signing up. And don't wait around, okay, because those seven days start the moment you apply. Then within three working days, those shares should land in your account. And using our link and the coupon will also help support Jan and I. So thank you in advance for that.
00:04:35 · Jan Watermann
[00:04:35] S1: It's super seamless, literally. Like just below the balance. Um, you got a button that encourages you to take out a loan. I'm not sure if that's always there or whether that's just there because my my balance is ridiculously low. I, as I said, I don't use Revolut on a daily basis. Um, I've said it before, I'm gonna say it again. But you click the button, and then you're literally in some sort of room, right? A room that looks somewhat like your banking app, but it's a dedicated room and you cannot just easily get out of there. Um, so it's very conversion optimized, I would say. Um they ask you a question, and um basically they want to figure out how much how much money you wanna wanna take out, and then let's say you you decline, you you scroll back, you're still in this room um where you have problems getting out, and let's say you find the exit button, you click exit, they still recognize that you've started your loan application, you get push notifications that you should should continue it. It's literally super conversion optimized. They they know what they're doing, and that's probably by purpose because that's how they make money, right? Um 6.9% APR as a representative APR, so that people that are getting less um or that are actually paying more. Wow, fascinating, right? It's incredibly lucrative for them.
00:05:45 · Jonny Pease, Jan Watermann
[00:05:45] S0: It's the the idea of having like loans digitized is being advertised to us as like an easier access, an easier way to get the money. It's more convenient, that's what they're saying. It's convenience, but quite frankly, it actually enables them to use arguably, this is just my opinion, maybe darker arts, maybe more nefarious tactics to get people to borrow. I I'm just saying this as my opinion. I'm not saying Revolut are doing this. That could also happen in the background. Like when you have to take a loan out with a high street bank that still needs you to go into a physical branch, Jan, you have so much time on the way there to think about it. You have so much paperwork to look through before you sign. There's a lot of opportunity for you to change your mind, to rethink your choices. But like you said, getting this in minutes, right, means that you don't have that opportunity. And I think that's quite scary. [00:06:40] S1: That's the thing, Jonny. Taking out a loan used to be a multi-day process, and now it's something you do in an afternoon, or maybe even within an yeah, within within minutes, literally. Um, like wow. Um I'm not sure if all of these decisions are made consciously, you know, without any regrets afterwards.
00:06:59 · Jonny Pease
[00:06:59] S0: Let's have a look at the wider loan market now, Jan. We've looked at 22 providers in total across our research. Well, I think I made it pretty clear in the introduction that we're not going to be recommending personal loans, but we thought for context, we thought it would be important just to have a look what other providers are offering. Nationwide and Monzo are offering loans of 5.9%, which is a percentage point lower than Revolution on a loan of 7.5 to 25,000 pounds. But they also have max APR. So nationwide Jan, right, have a maximum APR of 29.9%. Potentially, 49% of nationwide's customers could still pay 29.9% APR Jan on a personal loan. It's really quite astonishing. But yeah, if you if you look across these 22 providers, for those that are watching, we'll put a bit more nuance on the screen. You know, it it goes from as low as 5.9%, you know, through to like uh NatWest are charging as low as 7.9%, uh Monzo 10%, Zopa, who are Jan, always emailing me saying I'm eligible for a loan. They're always, I mean, I was at one point getting like a cadence, I think, of emails every two weeks saying, hey, you can get a personal loan, hey, you can get a personal loan. Now the email I think says 7.9% for me because they're able to look at the data inside my account and make that recommendation. Revolut will do the same. And Jan, tried to tell me why this is, okay. John Lewis Money, they offer personal loans to their customers through Zopa. They actually have an APR, advertised APR of 10%, which is less than half of Zopa. That is very confusing to me.