Revolut has begun offering consumer loans in the U.K. What does this mean for the company?

London-based fintech Revolut has launched its first loan product in the U.K. after obtaining a banking license—unsecured consumer loans. Francesca Carlesi, CEO of Revolut’s UK division, told Reuters about this. The company hopes this will allow it to gain ground against traditional British banks and increase its interest income, according to Bloomberg.

"We want to move from being a very successful app for everyday spending, <...> to actually becoming the primary bank for every person in the UK," said Carlesi.

The neobank has begun offering unsecured consumer loans ranging from £2,000 ($2,670) to £25,000 ($33,400) at interest rates ranging from 6.9% to 29.3% per annum, with repayment terms of one to five years. “We’ve made the loan application process transparent and simple: funds are disbursed almost immediately after approval, there are no early repayment fees, and our rates are competitive,” noted Carlesi.

Revolut will roll out its consumer loans in phases over the next few months. For now, they are available only to a small number of customers, according to Bloomberg. The company will also launch credit cards in the near future, Carlesi added. This is part of a broader strategy to increase revenue per customer: the fintech currently lags behind traditional banks in this regard, Reuters notes.

The company plans to gradually increase its lending volumes and has not set any targets for the size of its loan portfolio in the United Kingdom, the agency’s source noted.

Looking ahead, the bank plans to transfer a significant portion of its risks to investors through securitization and maintain a loan-to-deposit ratio of around 6%—much lower than that of other banks, Carlesi said. Over time, Revolut also intends to enter the highly competitive British mortgage market.

Revolut, which serves approximately 14 million customers in the United Kingdom, received a British banking license in March. In other markets, the company offers consumer loans, mortgages, and credit cards. Last year, interest income accounted for about 22% of Revolut’s global revenue, while the majority of the remaining revenue came from fees—which is atypical for large banks, Bloomberg notes.

Revolut’s launch of consumer loans in the U.K. takes the company beyond basic payment services and subscriptions into a riskier arena, as the fintech giant intends to compete directly with heavyweights such as NatWest, Lloyds, Barclays, Santander’s UK division, and HSBC, Reuters reports.

Since its founding in 2015 by Nick Storonsky and Vlad Yatsenko, Revolut has grown into a global service serving more than 80 million users, and its private valuation has reached $115 billion, exceeding the market capitalization of public competitors such as Barclays and NatWest, Reuters notes. Nevertheless, the question remains whether the bank will be able to maintain its rapid growth: Revolut’s revenue per customer is significantly lower than that of its competitors, and the share of customers who use it as their primary bank and receive their paychecks through it is still small, the agency reports.

This article was AI-translated and verified by a human editor