Koyo loans review 2023

Koyo claimed to be the UK’s first Open Banking-based online consumer lender. It targeted borrowers with little to no credit history who are looking to take out a loan.

As of July 2023, Koyo stopped lending. If you’re an existing customer, your loan is now being managed by Capquest.

Most lenders require that you have good credit history before they’ll approve you for a personal loan, which means it can be difficult to get finance if you’ve never had a chance to build your credit score. This may be because you’ve just moved to the UK, or because you’re still young and have never taken out a credit product before.

Koyo aimed to provide personal loans to those with limited credit history, but without the high fees and interest often charged by other traditional lenders. To do this, Koyo considered more than just your credit file – focusing instead on your banking transactions to check affordability.

When you apply for a personal loan with Koyo, you’ll need to log into your internet banking and allow Koyo to view your transactional data. This is becoming more common practice, and it’s known as Open Banking. Koyo uses a popular third party provider called TrueLayer.

Koyo uses this data to determine how affordable a loan would be for you, taking into account your income and outgoings. While most lenders only use a credit check (plus the information you’ve given in your application) to determine your risk as a borrower, Koyo will also use your Open Banking data. The theory is that this additional information can help them to approve applicants that would otherwise get rejected.

Yes. Koyo can run a “soft” search of your credit file, in conjunction with analysis of your banking transactions, to tell you whether or not your application would be successful. This doesn’t impact your credit score.

If it’s good news, and you decide to go ahead and apply for a Koyo loan, Koyo will run a “hard” credit search at that point. These have a small, usually short-lived, negative impact on your credit score – so you don’t want to do too many of these in a short space of time. In fact, you should only allow a hard credit search when you’re fairly confident you’re going to get approved. That’s why almost all lenders (including Koyo) let you check your eligibility beforehand.

Koyo isn’t looking for decades of responsible use of mortgages/cards/loans etc. in your credit record, however – in fact it specialises in catering to those with limited credit histories. Bad credit (primarily missing loan or card repayments) and CCJs are deal-breakers for Koyo, but a thin credit file isn’t.

Koyo offers personal loans for those who don’t have a detailed credit history. This may include:

• People who are new to the UK
• Students or young people
• Customers with no credit history

You’ll need to be over 21 and have lived in the UK for at least six months. You must not have a history of bad credit or county court judgements (CCJs) and you must not be bankrupt.

Koyo is a trading name of Betr Technology Ltd., which is authorised and regulated by the Financial Conduct Authority (FCA).

To gain read-only visibility of your banking transaction data (if you give it permission to do so), Koyo works with a third party provider called TrueLayer, which is also authorised and regulated by the FCA, and is used by several UK lenders. TrueLayer is also a regulated Open Banking provider. Using this open banking connection, Koyo can analyse transactions, but does not have the power to action transactions.

Koyo uses smart open banking tech to offer competitive pricing to a niche audience that’s been largely overlooked in the past.

If you’ve previously used credit products in the UK, and have built up a good credit record, then chances are you’ll get a better deal with more mainstream lenders. And similarly, if you have a damaged credit file, then other specialist lenders are more likely to be able to help you.

But for those with little to no evidence of credit use in the UK, who are being responsible with their finances and can afford to take on a loan. Koyo is a sensible bet.