Just a few weeks after N26 started offering credit in Germany, fintech startup Revolut is also launching a brand new credit feature for U.K. users. Behind the scenes, Revolut is working with Lending Works to provide those credit lines.
Lending Works is a peer-to-peer lending company that matches individual lenders with borrowers. So Revolut chose not to work with a traditional bank for this feature.
As always, you only need to open Revolut’s mobile app to apply for credit. You can select how much money you want and the number of months you need to pay it back. You’ll also need to enter your monthly income and residential status. After that, you get a quote and you can accept or decline.
Revolut says you’ll end up paying £52 to borrow £1,000 over a year — that’s a 9.9 percent representative APR. This should be cheaper than using your credit card or a traditional loan. Of course, this will vary greatly if you try to borrow more money over a longer period.
You can get a credit line for £500 to £5,000 with a repayment period between 12 and 60 months. You also can repay the loan early.
And this is just step one as Revolut plans to partner with more third-party companies in the future. You can expect travel insurance, an investment product and savings accounts in multiple currencies.
While Lending Works is an easy way to get started, Revolut also plans to allow lending and borrowing between Revolut users in multiple countries. If Revolut can assess the risks correctly, this could end up generating a steady revenue stream for the startup.
Revolut now has 530,000 users across Europe. After signing up, you receive a MasterCard that lets you spend money anywhere around the world without any fee. You can top up your Revolut account in USD, GBP and EUR using a credit card or bank transfer.
Revolut tries to match the interbank rate as much as possible when you convert money between these three currencies and transfer money out of your Revolut account in 23 currencies. Slowly but surely, Revolut is building an alternative to your good old bank account.[gallery ids="1464210,1464211"]