Nationwide introduce summary box for personal loans

Nationwide has launched a summary box for all new personal loans. The summary box is the first of its kind for loans in the UK and will give borrowers an 'at a glance' summary of everything they need to know about a Nationwide personal loan, before they buy it.

Although Nationwide has just one rate for its personal loans, meaning little or no confusion for its customers, it has decided to introduce the summary box following mystery shopper research of major personal loan issuers in the UK. The research showed that many borrowers have no idea of the loan rate they will be offered until they have actually applied and been credit scored. At present, for borrowers trying to shop around to get the best deal on their loan, each credit score on their record makes it harder to be accepted elsewhere.

However, if the rest of the industry adopts the Nationwide summary box approach, then consumers will be able to see, when they apply, exactly what the true cost will be before deciding which loan is right for them. Nationwide believes this will end the lack of transparency that is prevalent in the market.

Nationwide's summary box includes details of:
- the interest rate a customer will be offered (assuming they are accepted for a loan);
- how much will be lent and for how long;
- any arrangement and early redemption charges;
- example costs of loan repayments and Payment Protection Insurance, if applicable.

Stuart Bernau, executive director at Nationwide, said: "There is too much confusion and lack of transparency for consumers taking out a personal loan. It is up to the industry to be fair and give clearer information to enable customers to make a decision. If the industry adopted Nationwide's lead, it would highlight some of the extortionate rates people currently have to pay for personal loans. This will lead to more consumers getting a better deal."