Challenger bank Starling is rolling out its first unsecured loan products, offering customers the chance to choose how they structure lending up to £5,000.

Users of the mobile-only bank can request a loan through its app and will have instant access to the funds as soon the borrowing has been approved. They will then be able to decide the dates of payment and the repayment schedule.

Monthly payments and the total repayment at the end of the term will be displayed in the app, and there will be no penalty fee for early repayment of the full amount.

Starling hopes its fast-approval loans model will help customers with financial planning for ‘big ticket’ items like cars and home improvements, or to spread the cost of items they have already bought.

Stuart Leak, head of lending at Starling Bank, said the ‘spread the cost loans’ - which are linked to the customer’s overdraft - offer greater flexibility. Those who have been approved for a Starling overdraft can then apply for a loan, which will usually be cheaper than an overdraft.

“If an unexpected bill hits your account, or you are faced with an unavoidable large expense, you’ll be able to spread the cost with a loan and choose a repayment method, including both the time period and monthly repayment amount that suit you,” Leak added.

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