Starling Bank

Starling Bank personal loans review April 2019

Digital-only bank Starling aims to make borrowing quick and easy for its app users.

If you’re already firmly entrenched in the Starling ecosystem and enjoy visibility of your spending in real time via the app, you won’t be surprised to hear that Starling also offers super-convenient options for borrowing.

However, for those who are new to Starling, it describes itself as a “tech business with a banking licence”. Customers are given a current account, a Mastercard debit card and a mobile app to track it with. The app is a lot smarter than most banking apps and gives you all sorts of insights into your spending. Check out our full review of the app to find out more.

So how does it work?

Your Starling account comes with an overdraft (if you’re eligible to have one) with a personalised limit. But rather than accessing this available credit through the overdraft, you have the option to take out some or all of it as a loan.

That means that the biggest loan you can get will depend on how much of your overdraft you’re using. Say you have a £2,000 overdraft limit and you’re £100 overdrawn, you could borrow up to £1,900 as a loan.

When you make a large purchase on your Starling Bank debit card, you will be sent a prompt asking if you want to turn it into a loan. But you can also just apply for a loan when you decide to – perhaps if you’ve got a hefty expenditure coming up.

Why wouldn’t I just use my overdraft facility?

Mainly because the overdraft has a higher rate of interest. The interest rate you’d pay on a Starling loan is dependent on Starling’s assessment of “your personal financial situation” (read “your income, outgoings and credit record”).

You might also prefer the structure of a personal loan. Unlike an overdraft, you commit to paying back a fixed amount each month, so you know in advance exactly how much the loan will cost overall and when you’ll be debt-free.

Ultimately you’ll need to decide if this original approach to borrowing is right for you. It’s hard to fault the convenience of the service, but some might find it a little too convenient!

Compare personal loans

Comparison ordered by representative APR with affiliated products shown first. Rates updated 24 Apr 2019.
Name Product Total Payable Monthly Repayment Representative APR
Representative example: Borrow £10,000.00 over 3 years at a rate of 5.5% p.a. (fixed). Representative APR 5.5% and total payable £10,848.60 in monthly repayments of £301.35.
Representative example: Borrow £10,000.00 over 3 years at a rate of 3.4% p.a. (fixed). Representative APR 3.4% and total payable £10,524.24 in monthly repayments of £292.34.
Representative example: Borrow £15,001.00 over 3 years at a rate of 3.1% p.a. (fixed). Representative APR 3.1% and total payable £15,718.32 in monthly repayments of £436.62.
Representative example: Borrow £10,000.00 over 3 years at a rate of 3.3% p.a. (fixed). Representative APR 3.3% and total payable £10,509.12 in monthly repayments of £291.92.
Representative example: Borrow £15,001.00 over 3 years at a rate of 3.1% p.a. (fixed). Representative APR 3.1% and total payable £15,718.32 in monthly repayments of £436.62.
Representative example: Borrow £10,000.00 over 3 years at a rate of 3.9% p.a. (fixed). Representative APR 3.9% and total payable £10,601.64 in monthly repayments of £294.49.
Representative example: Borrow £10,000.00 over 3 years at a rate of 2.8% p.a. (fixed). Representative APR 2.8% and total payable £10,431.72 in monthly repayments of £289.77.

Compare up to 4 providers

Name Product Total Payable Monthly Repayment Representative APR
Representative example: Borrow £2,000.00 over 2 years at a rate of 35.9% p.a. (fixed). Representative APR 35.9% and total payable £2,710.32 in monthly repayments of £112.93.
Representative example: Borrow £5,000.00 over 2 years at a rate of 16.6% p.a. (fixed) with an application fee of £20,000.00. Representative APR 22.9% and total payable £6,154.32 in monthly repayments of £256.43.
Representative example: Borrow £10,000.00 over 3 years at a rate of 34.4% p.a. (fixed). Representative APR 34.4% and total payable £15,269.04 in monthly repayments of £424.14.
Representative example: Borrow £7,500.00 over 5 years at a rate of 18.9% p.a. (fixed) with an application fee of £45,000.00. Representative APR 22.9% and total payable £12,123.00 in monthly repayments of £202.05.
Representative example: Borrow £7,500.00 over 3 years at a rate of 18.0% p.a. (fixed) with an application fee of £37,500.00. Representative APR 22.9% and total payable £10,144.08 in monthly repayments of £281.78.
Representative example: Borrow £3,000.00 over 1 years at a rate of 13.5% p.a. (fixed) with an application fee of £9,000.00. Representative APR 22.9% and total payable £3,348.60 in monthly repayments of £279.05.
Representative example: Borrow £10,000.00 over 3 years at a rate of 31.9% p.a. (fixed) with an application fee of £-12,500.00. Representative APR 42.5% and total payable £16,477.92 in monthly repayments of £457.72.
Representative example: Borrow £10,000.00 over 3 years at a rate of 49.7% p.a. (fixed). Representative APR 49.7% and total payable £17,537.04 in monthly repayments of £487.14.
Representative example: Borrow £7,500.00 over 4 years at a rate of 18.4% p.a. (fixed) with an application fee of £45,000.00. Representative APR 22.9% and total payable £11,108.16 in monthly repayments of £231.42.

Compare up to 4 providers

Name Product Total Payable Monthly Repayment Representative APR
Representative example: Borrow £2,000.00 over 2 years at a rate of 99.9% p.a. (fixed). Representative APR 99.9% and total payable £3,804.00 in monthly repayments of £158.50.
Representative example: Borrow £10,000.00 over 3 years at a rate of 34.4% p.a. (fixed). Representative APR 34.4% and total payable £15,269.04 in monthly repayments of £424.14.
Representative example: Borrow £350.00 over 6 months at a rate of 220% p.a. (fixed). Representative APR 651.4% and total payable £605.55 in monthly repayments of £100.93.

Compare up to 4 providers

Important information:
You should always refer to your loan agreement for exact repayment amounts as they may vary from our results.

warning icon Warning: late repayments can cause you serious money problems. See our debt help guides.

Key features at a glance

  • Available to Starling Bank account holders. To be eligible, you’ll need to get the current account and app.
  • Borrow £500 to £5,000. You can borrow as much as you have left in your available overdraft.
  • Repay over 12 to 60 months. Choose a repayment term to suit you.
  • Personalised rates. Starling tailors rates and limits to the individual – you’re not guaranteed to be offered the advertised APR. There are more competitive rates out there, so you might have to decide how much you value the convenience a Starling loan offers.
  • No hidden fees. There’s no arrangement or exit fee – you’ll only be charged interest on your loan.
  • Fixed monthly repayments. You’ll pay the same amount each month (unless you opt to overpay, which you can) – helping you to budget. This also means that the overall cost of the loan will be clear from the start.
  • Penalty-free early repayment. You can pay back your loan at any time without being charged, and you could save interest by doing so, because Starling only charges interest on a daily basis for what you actually use.
  • Did we mention it’s convenient? You can apply in just a few minutes using your app – head for the “spaces” section. Once approved, you’ll see the money land in your account straightaway. Once you have your loan, you can see at a glance how many payments you’ve got left, when they’ll be going out and how much they’ll be for.
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Starling loans and your credit score

When you apply for a current account with Starling Bank, it’ll perform a “soft” credit check to inform its decision and determine if it can offer you an overdraft and/or loan. This check will be visible to you, but not to other financial institutions.

Then, if you decide to take out a loan or activate the overdraft, Starling will run a “hard” credit check, which will leave a footprint on your credit file, and has a small, but usually short-lived, negative impact on your credit score.

Am I eligible for a Starling Bank personal loan?

You should only apply for a Starling Bank personal loan if you’re certain you can meet the repayment terms. You must also:

  • Have a Starling Bank current account with an overdraft facility
  • Be aged 18 or over
  • Have a good credit history

How can I apply?

If you’re a Starling Bank customer, you’ll get a notification on the app that you are eligible for a personal loan. To apply, you go through a simple process in the app. You’ll be asked questions about your general finances and also why you need the loan. This should take around five minutes and, once approved, the money will be available straight away.

Some people may find it a little too easy to borrow money from Starling. When you make a bigger than normal purchase with your debit card, you will be sent a prompt asking if you would like to turn it into a loan. This might mean you take on a loan when you otherwise wouldn’t. It all depends on how good you are at managing your finances when it comes to deciding if this is the right approach for you.

Frequently asked questions

*Disclaimer: The offers compared on this page are chosen from a range of products whose details Finder has access to track; they don't represent all the products available in the market. Unless indicated otherwise, products are displayed in no particular order or ranking. The terms "best", "top", "cheap" (and variations) are not product ratings and are subject to our terms of use. You should consider seeking independent financial advice and consider your personal financial circumstances when comparing products.

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