Making your monthly loan repayment from another bank account
You can now make your monthly loan repayment from another bank account through open banking (once it’s available to you). Here's how it works.
Setting up loan repayments from your other bank account
We're introducing this feature gradually. You’ll see the option on your loan screen in the app once you have access. Here’s where to find it once it’s rolled out to you: Go to the “Home” tab in the Monzo app and tap on your loan Under "Payment settings”, tap on "Monthly from” Choose "Add bank" and follow the instructions to link your other bank account. If your bank isn’t on the list of supported banks, it’s because we haven’t connected with it yet. Confirm the payment in the Monzo app and choose whether to use your Monzo account as a backup This sets up a virtual Monzo account in your name specifically for open banking payments. This account acts as a secure, behind-the-scenes connection to your loan. You won't be able to access the virtual account, and shouldn't make other bank transfers to this account. If you try to manually transfer money to the virtual account, we'll automatically return that payment to you.
If your payment doesn’t go through
When you set up your repayment, you can choose to use your Monzo account as a backup. If there's not enough money in your other account, we’ll take the full amount from your Monzo account if you've set it as a backup and you have enough money. (We won’t take a partial payment from your other account). If you don’t have a backup, or you don’t have enough money in your Monzo account, you’ll have to pay manually in the app. Pay before the end of the day to make sure you stay up to date on your loan. We won’t automatically retry a missed payment. You'll need to make a one-off payment through your Monzo app. Future payments will still use your other account as planned.
Differences between open banking payments and Direct Debits
Although open banking payments work similarly to Direct Debits, there are a few differences. Open banking payments are usually taken immediately, so they won’t show as a pending transaction in your other bank account like a Direct Debit might. Open banking payments aren’t covered by the Direct Debit guarantee. But you can still cancel your open banking payment at any time and switch back to paying from your Monzo account.
We're here to help
If you have questions or any issues with repaying your loan from another bank account, chat to us in the Monzo app by tapping the Help button.
