The Nationwide Building Society has taken another step to try and make borrowing fairer for all new and existing customers.
Early settlement charges on all of the society’s personal consumer loans are to be removed to allow customers to repay loans early without extra costs.
The move is expected to benefit about 70 per cent of consumers who have personal loans with the Nationwide and pay off the borrowing early.
The building society have said that this could save customers an average of £70 based on the loan size, interest rate and when they choose to settle.
The Consumer Credit Act currently allows for up to 58 days’ interest to be charged when a customer requests a settlement quotation.
This latest move by the Nationwide follows the decision last year to remove the over-limit fee on credit cards so customers aren’t penalised for ‘making a mistake’.
The Nationwide also offers soft quotes on personal loans and credit cards at application stage, so customers know the rate they will be charged prior to a full quote, which when requested can impact credit scores.
Soft quotes for consumer loans and credit card applications have no impact on the consumer’s credit score, whereas a full quote for finance can be added to the credit record of the applicant and affect their credit score for the future, even if the finance is not taken.
Nationwide’s head of personal loans, Carl Burke, commented: ‘As a mutual we’re always looking at how we can reinvest value back to our membership and this latest change is another example of this.
‘The significant majority of our customers repay their personal loan early and we think it’s right that we don’t penalise these customers for doing so.’