Revolut, Cross River link up to offer US consumer loans

Dive Brief:

Neobank Revolut is partnering with Cross River Bank to offer personal loans to its U.S. consumers, the two companies announced Thursday.
The London-based fintech, which is already partnering with New York-based Metropolitan Commercial Bank to offer digital banking services in the U.S., said it is leveraging Cross River’s technology and regulatory expertise to scale and expand across business verticals including credit.
Revolut said customers who use the personal loan offering, which will be available for its U.S. customers in the coming months, won’t be subject to late fees, origination fees or prepayment penalties.

Dive Insight:

Since entering the North American market in 2020, Revolut has been trying to establish its presence in a digital banking landscape dominated by U.S.-based players such as Varo and Chime.

Revolut's upcoming consumer loans product offering will help set it apart from other competitors in the space, the company said.

"We’re trying to create a financial superapp that can cater to every single financial need of the customer. That’s the genesis of this product," said Tarun Bhushan, Revolut’s head of U.S. lending.

The personal loan product will feature same-day loan funding, the company said. Customers can also set up automatic payments for the loans.

"[O]nce the loan is approved, it can land in the user’s Revolut wallet account in minutes," the company said in a press release.

Revolut said it is notifying customers via email if they have been pre-selected for the personal loan offering.

The neobank plans to offer loans ranging from $1,000 to $30,000. That range, however, is subject to revision as the company collects more credit data ahead of the launch, Bhushan said.

"We have done a lot of analytics using credit bureau datasets to ensure that we are offering very competitive interest rates as well," Bhushan said.

The neobank offers its personal loan product to customers based in Poland, Lithuania and Ireland, Bhushan said.

The start of the COVID-19 pandemic impacted Revolut’s entrance in the U.S. in early 2020; the neobank launched without the fanfare it had shown in other markets, former Revolut USA CEO Ron Oliveira told Banking Dive last year.

"We knew what we had to offer resonated, even in COVID times, so that's why we launched. However, there was no reason, we felt, to advertise and push the product any further than that, because of what was going to happen with travel, with people in or out of the office, all those elements," said Oliveira, who left the fintech in January to become the CEO of Bellevue, Washington-based Moonstone Bank, according to his LinkedIn profile.

To gain an edge in the competitive U.S. market, Revolut has also taken the bank charter route.

The company submitted a draft application with the Federal Deposit Insurance Corp. (FDIC) and the California Department of Financial Protection and Innovation in March 2021 to obtain a banking license in the U.S.

The neobank also launched a small-business banking product stateside last year, and is exploring offering loans to its small-business customers, Bhushan said.

"We don’t want to create products to cater to just one small segment in one country. We are building a global financial superapp," Bhushan said. "You will see a lot more products over the coming months or years. We’re going to continue to offer more and more options to our consumers to satisfy all their financial needs."