Nationwide has "doubled" an essential customer benefit as part of a substantial cost-of-living increase. Nationwide, the UK's largest building society, which competes with Lloyds, HSBC UK, Santander, NatWest, and others, has quadrupled the maximum personal loan it would offer clients to £50,000.
Nationwide Increases Maximum Loan Amount to £50,000
Nationwide current account customers who pass its affordability checks will be eligible for the enhanced loan amount, the building society confirmed on Friday (May 17).
It stated that its study had revealed that half of those working on building projects had already had to reduce or cancel their plans owing to financial constraints, and that with construction costs expected to climb by another 15% over the next five years, more would face expensive expenses.
The additional loan amount will be accessible to Nationwide current account holders who meet the affordability requirements.
The interest rate will vary depending on the customer's circumstances, but the typical APR - which is the highest amount that at least 51% of borrowers will pay - is 7.9% for loans of £25,001 to £35,000 and 8.9% for loans of £35,001 to £50,000.
The loans can be negotiated for one to seven years, and there is no penalty for paying off the loan early. Andrew Hagger, a personal finance specialist at Money Comms, said the building society's decision meant they remained in the minority.
But the financial expert further stated: “I think it’s a sign of the times that you can now apply for a £50,000 unsecured loan – it may be more expensive than a mortgage further advance rate wise, but way quicker to arrange plus no fees to worry about and no early repayment charge either.”
Head of Personal Loans Emphasizes Responsible Lending Approach
Nationwide's head of personal loans, Darren Bailey, said in a statement following the regulation change yesterday: "Whether you're looking to fund home improvements, a new car, or consolidate existing debts, we'll be able to meet more of our customers' borrowing needs."
And Mr Bailey stated: “As a responsible lender it is important we make sure customers don’t overstretch themselves. Each loan application is individually assessed to make sure people can afford the repayments alongside their existing and any future outgoings.
"Those applying for a personal loan can get a soft quote which advises them if they are likely to be accepted and at what APR without impacting their credit file, allowing them to make an informed borrowing decision.”