Revolut is ramping up its battle with high street banking giants with the launch of personal loans in the UK market.
The digital bank said on Monday it would begin offering loans between £2,000 and £25,000, which will be repayable over one to five years.
The firm has insisted loans will have “transparent terms” and funds will be transferred within “minutes” following approval.
“UK consumers can face unnecessary friction and complex fee structures when borrowing. We’ve built a transparent and simple loan process with near-instant funds on approval, no fee for early repayment and competitive rates,” Francesca Carlesi, chief executive of Revolut UK, said.
Rates will range from 6.9 per cent to 29.3 per cent APR.
Carlesi added bringing credit into the group’s ecosystem would help customers use its product for an “all in one place” experience.
The move will push Revolut beyond its foundational payment products and put it toe-to-toe with incumbent lenders.
Revolut eyes competitive mortgage market
Revolut was created in 2015 and has expanded across lifestyle and payment products. Earlier this year, it secured its full-fat UK banking licence after a four-year wait paving the way for it to enter the riskier market of lending.
Carlesi told Reuters the firm plans to eventually enter the UK’s competitive mortgage market. Lloyds Banking Group currently dominates the mortgage market, owning roughly a fifth of the market share. But it also faces competition from the likes of Natwest, Santander, Barclays and the country’s largest building society Nationwide.
The UK’s big four banks – Natwest, Lloyds, HSBC and Barclays – currently hold around 60 per cent of the industry’s £2.5 trillion in deposits.
Revolut, which boasts 80m customers globally and 13m in the UK, posted a 57 per cent surge in group-wide profit to £1.7bn in its latest financial year, driven by growth across subscriptions, payments and wealth.
Subscriptions notched the highest year-on-year revenue increase – and outperformed headline profit and revenue growth – at 67 per cent to £708m.
But its per-customer revenue has remained below rivals as the firm continues to fight for users to use the service as their primary bank.
Revolut’s founder Nik Storonsky said in March following the licence approval that launching the UK bank had been a “long-term strategic priority.. and marks a significant moment in our journey”.