N26 is iterating at an incredible pace these days with a ton of new product features and geographical expansions to build the most modern bank in Europe. But the new features always follow the same motto — your current bank sucks, everything should be simpler. Today, N26 introduces consumer credit done right.
I saw a preview of the feature a couple of weeks ago and it was quite impressive. If you live in Germany, you can now open the app and apply for a credit line. The app will walk you through a form, asking you the usual questions.
You’ll tell how much money you need, if you’re single or married, if you’re a home owner, etc. At the end of the credit check, you’ll instantly get the effective annual rate and how much the credit line is actually going to cost. You can also customize the length of your loan.
If you ask for €10,000, N26 will give you the interest rate (4.59 percent p.a. for example) and the total amount (€10,475). This is straightforward and N26 doesn’t try to hide anything from you. If you accept, the money shows up on your N26 account an hour later without any complicated paperwork.
The feature is only live in Germany and works for credit lines between €1,000 and €25,000 for up to five years — interest rates range between 2.99 percent to 8.00 percent p.a. Behind the scene, N26 can either handle the credit line itself or find a third-party bank for this loan.
And this is where N26 shines. The startup puts together simple consumer-facing features with a complicated infrastructure — N26 users don’t need to know where the money comes from as long as they know how much they need to pay back.
What about other markets? If you’ve been paying attention to N26 lately, you know that the company now has a full banking license that works across Europe. N26 co-founder and CEO Valentin Stalf announced at TechCrunch Disrupt that the company would expand to 17 European countries in total. Consumers from all these countries can now open an N26 account.
But that’s just one part of the story. The startup plans to look closely at the most promising markets to build a better product on these markets. And it starts with France. There are only 30,000 users in France right now, but the company is getting 1,000 new users per day. Stalf told me that French consumer banks are among the most expensive banks in Europe.
With this kind of momentum, there could be hundreds of thousands of N26 users in France in very little time. So N26 is going to hire country managers based in Berlin for key European markets — Jérémie Rosselli is going to head France for instance. Then, N26 will partner with French fintech startups and build out all the existing N26 features that German customers already know and use.
It’s a bit more complicated than flipping a switch to launch financial products across Europe. But you can expect investment, credit and overdraft features in France at some point in the future. Other countries, such as Spain and Italy, should come next.