The Green Deal Finance Company, the not-for-profit mutual established to finance and administer Green Deal Plans, is today announcing the removal with immediate effect of early repayment charges on all future Green Deal Plans.
Consumers have the right to early repayment of their loan, in full or in part at any time. However, under the current provisions in the Consumer Credit Act, there is a procedure that allows the Green Deal Providers to claim compensation for costs incurred as a result. Early repayment charges are commonplace with mortgages and with some other financial service products.
No early repayment charges have so far been levied on Green Deal Plans and the GDFC will encourage GDPs to look favourably at waiving early repayment charges that might apply to plans already purchased.
The removal of the potential charge forms part of a simplification package to help Green Deal Providers and is a result of a listening exercise with consumer organisations.
Mark Bayley, Chief Executive of the Green Deal Finance Company said today: “I am delighted that we are able to remove early repayment charges on Green Deal Plans at such an early stage in the life of the Green Deal. This action is in direct response to views raised with us, and will make Green Deal Plans an even more attractive, accessible and predictable proposition for energy saving home improvement”.
Early Repayment Charges – The Previous Arrangements
If the loan was for a period of less than 15 years and the early repayment was for less than £8000, no charge applied.
If the loan was to be repaid over 15 years or more, the maximum charge was £6 for each year left on the loan, for every £1,000 repaid early.