first direct offers loan cashback

23 August 2006
The UK's largest dedicated online bank, first direct, is offering customers cashback on loans when they repay their debt on the agreed date.

The cashback deal will mean customers who qualify will receive 25 per cent of the total amount of interest they incur with the loan back after they make the final instalment payment.

first direct's offer applies to all loans for between £5,000 and £25,000 over a term of no less than two years taken out by October 2nd 2006.

Loan gimmicks that encourage borrowers to stick to the original terms of their borrowing agreement have come under fire recently for forcing customers to take out a loan at a higher rate than the best buy loans available.

Although customers receive a 'reward' for fulfilling the original payment terms of their borrowing agreement, in order to receive a preferential rate or the cashback offered to them, customers effectively waive their ability to pay off the loan early.

Despite this, analysts say that for those intent on sticking to a particular term for borrowing money, these kinds of deals can equate to very good rates over the long-term.

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