Revolut to take fight to high street banks with UK personal loans

Revolut is set to enter the UK's personal loan market, challenging established high street banks with its new offering. The company plans to provide loans ranging from £2,000 to £25,000, with repayment terms spanning one to five years. Revolut emphasizes that its loans will come with transparent terms and funds will be transferred within minutes of approval.

Francesca Carlesi, Revolut's UK chief executive, explained that the company aims to simplify the loan process, offering near-instant funds on approval, no early repayment fees, and competitive interest rates ranging from 6.9% to 29.3% APR. Carlesi believes that integrating credit services within Revolut's existing platform will enhance users' overall experience.

This move marks a significant expansion for Revolut, taking it beyond its initial payment products and positioning it in direct competition with traditional lenders. The launch comes after Revolut secured its UK banking license earlier this year, following a four-year application process. With ambitions to eventually enter the UK mortgage market, Revolut aims to rival established lenders like Lloyds Banking Group, which currently controls about a fifth of the mortgage market.

The UK banking sector is dominated by the big four banks – Natwest, Lloyds, HSBC, and Barclays – holding around 60% of the £2.5 trillion in deposits. Revolut, which has 80 million customers worldwide and 13 million in the UK, reported a 57% increase in group-wide profit to £1.7 billion in its latest financial year. The company's growth is primarily driven by subscriptions, payments, and wealth management services.

While Revolut's per-customer revenue remains lower than its competitors, founder Nik Storonsky emphasized that launching the UK bank was a "long-term strategic priority" and a crucial step in the company's growth trajectory.