Revolut Loans in Portugal: The End of the Bargain?

“Primeiro dão‑te o doce, depois cobram‑te o pacote inteiro.”

A popular Portuguese saying, overheard on the 28 tram as commuters compared Revolut’s latest fee changes.

When Revolut parachuted into Portugal’s personal loan market in mid-2024, it dressed itself in the full vocabulary of challenger swagger: instant approvals, no paperwork, “TAEG desde 7,6%”, and money in your account before your espresso cooled. Media outlets dutifully parroted the pitch and social media feeds filled with screenshots of glossy purple approval screens. The British-Lithuanian fintech, already embraced by two million Portuguese for its cheap FX and slick budgeting widgets, looked poised to do to consumer credit what it once did to holiday cash.

Barely thirteen months later, that promise feels as dated as a 2019 selfie stick. Revolut’s representative TAEG now starts at 9,65%, a two-point jump that wipes out the margin it once claimed over incumbents. Meanwhile, a procession of small-print “optimisations” has chiselled away at the app’s once-vaunted perks: Metal travel insurance now covers only trips bought on Revolut, the generous 90-day limit has shrunk to 30 days, and baggage delay compensation now requires eight hours of purgatory instead of four. Subscription prices have risen. And user forums hum with a single, cynical question: was the low-cost rhetoric ever more than a Trojan horse for market share?

The Rise (and Rise) of the Rate

In the heady days of May 2024, Revolut’s Portuguese launch materials trumpeted TAEGs “from 7,6%”. That figure put the newcomer comfortably inside the cheapest decile of legal consumer credit offers, and more than two points below Caixa Geral, Cofidis, and Banco CTT, whose price tags started at 9,9%. For the digitally fluent, such as young professionals, remote workers, and the Lisbon-Porto tech shuttle, that differential mattered more than the absence of a branch network or a Portuguese call centre.

Fast-forward to July 2025 and the official landing page paints a duller picture: “TAEG desde 9,65%, sujeito a avaliação de solvabilidade.” Scroll further and the risk ladder climbs to 14,7% for less pristine borrowers, nudging the statutory ceiling of 15,9% set by Banco de Portugal for unsecured personal credit. That spread no longer looks revolutionary; it looks average.

A Glance at the Competition (July 2025)

Revolut: Desde 9,65% (up from 7,6%)

Caixa Geral, Cofidis, Banco CTT, Cetelem: Desde 9,9%

ActivoBank: Desde 10,5%

Santander: Desde 13,2%

Bankinter: Desde 16%

Outside the traditional banking bubble, DEGIRO finances euro margin balances at 4,75%, half Revolut’s entry point. Granted, margin lending is not a like-for-like substitute for an instalment loan, but for disciplined investors, the cost comparison is impossible to ignore.

The Mechanics of a Creep

Why the sudden inflation? Revolut’s press team pins the adjustment on “macro-economic rate normalisation and prudent credit governance.” Industry analysts offer a blunter assessment: the blue-skies launch price was a penetration-pricing gambit designed to hoover up early adopters, train its fledgling risk engine on Portuguese data, then migrate to mainstream economics once volume milestones were hit. Call it Amazon’s playbook, minus Prime Video.

Insiders also whisper that the model, heavy on open-banking inflow analysis and sparse on conventional bureau scores, proved too generous in its first quarter, green-lighting borderline borrowers and triggering costlier-than-forecast provisioning. The remedy? Hike the floor, widen the spread, and pray attrition stays below marketing’s replacement cost.

Risk Model or Roulette Wheel?

Revolut loves to boast about “AI-driven underwriting” that crunches behavioural data: device type, spending cadence, even late-night takeaway habits. The company calls it inclusive; critics call it a black box. A spring-2025 think-tank paper on algorithmic bias warned that such digital-footprint models “systematically mis-rank minority and low-income applicants due to thinner data and noisier signals.” Revolut is not named, but the shoe fits.

Transparency remains opaque. Applicants declined for a loan receive a four-line notification bereft of actionable detail. Appeals are routed through an FAQ link. Compare that to Banco CTT, which, in line with EU consumer credit directives, issues a full credit-file breakdown and tailored remediation steps.

Perks in Reverse

If higher interest rates were the only irritant, Revolut’s shine might yet survive; after all, apps can tweak pricing as quickly as the European Central Bank tweaks deposit rates. But the attrition of ancillary benefits cuts deeper because it strikes at the brand’s lifestyle promise.

Travel Insurance: The Goalposts Shift

Remember the triumphant billboard near Praça do Comércio? “Trips up to 90 days covered. Any airline, any card.” From 5 January 2025, that boast is museum material. The new rulebook says:

Coverage applies only to travel bought with a Revolut account. Pay your TAP fare on a legacy Visa and you’re on your own.

Trip length is capped at 30 days for Metal subscribers, down from 90. Ultra plan holders retain 90 days, but at €55/month, few casual travellers will swallow the fee.

Delay benefits now trigger after eight hours rather than four, slashing the number of claimable events by two-thirds.

The pivot feels especially galling because users already pony up €16,99 per month for Metal, a price hiked in April. Revolut argues that insurance utilisation was “disproportionately high” and threatened plan economics. Customers counter that a billboard promise should outlive the poster glue.

Subscription Sticker Shock

Metal and Premium saw a €2 to €4 monthly uplift in April 2025. At the same time, free-plan FX allowances were halved, ATM withdrawal caps slipped from €200 to €150, and cross-border card-delivery fees quietly doubled.

The DEGIRO Benchmark

So where can thrifty Portuguese turn? Ironically, a Dutch discount broker offers the starkest contrast. DEGIRO’s standard debit-money tariff on euro balances is 4,75%, unchanged since 2023. The product targets margin investors, not holiday shoppers, but its existence underscores a core truth: cheap capital is out there when overheads are minimal and growth is tempered by prudence.

Is the Game Up?

Penetration pricing is not inherently villainous. Netflix, Spotify, and even Portugal’s own MEO endowed users with cheap teasers before raising tickets to sustainable levels. The difference lies in expectation management. Revolut cultivated a Robin Hood mystique: “We’ll undercut the banks forever.” When forever morphed into eighteen months, customers felt hoodwinked.

Equally troubling is the timing. The fintech was fined €3,5 million by Lithuania’s central bank in April 2025 for AML deficiencies, a regulatory slap that reminds observers how brittle hyper-growth can become when compliance plays catch-up.

Consumer Checklist

Interrogate the TAEG. The lowest headline rate is reserved for prime borrowers. Ask for a personalised simulation before sharing payslips.

Read the insurance appendix twice. If your trip straddles 30 days or you used another card at checkout, assume you are uninsured.

Compare like for like. If you can tolerate branch paperwork, Caixa Geral’s 9,9% no-fee loan may outshine Revolut’s 9,65% once you factor in the absence of setup commissions but higher daily-interest accrual on Revolut’s diminishing-balance schedule.

Assess liquidity needs. For short-term financing under €5,000, an overdraft from Crédito Agrícola at 8,9% (secured against salary) can trump both.

Weigh the ecosystem lock-in. Revolut’s perks shine brightest when you live entirely inside its walls. If you value open banking portability, the glow fades quickly.

Final Thoughts

Revolut remains a marvel of interface design and cross-border usability. For micro-investors dabbling in U.S. equities or travellers swapping euros for baht, it still outclasses Portugal’s legacy banks. But as a lender, its cost advantage has evaporated, and its habit of quietly rewriting the rules should make even the most app-savvy consumer cautious.

Penetration gains are hard-won and easily lost. If Revolut wishes to hold onto the millions of Portuguese who downloaded it for its renegade ethos, it must decide whether to be a bank like any other or the insurgent it once promised. At the moment, the numbers, and the small print, suggest the metamorphosis is nearly complete.