As part of the bank’s bid to encourage responsible borrowing, anyone repaying their loan in full by the due date will receive 25 per cent of the interest paid back, regardless of loan size.
Joe Garner, head of UK personal financial services at HSBC, explained the move: “When a bank sets its interest rates a part of that calculation takes into account the possibility that customers might miss repayments.
“If a customer is conscientious enough to meet all their repayments in full until their agreed completion date, then we should recognise that and give something back.”
Although the bank has decided to reward responsible borrowing, it comes amid calls for banks to be more responsible lenders on issuing loans to people who can ill afford them.
While those who can afford to repay the loans will be rewarded by HSBC, those who can’t will add to their debt by having to repay more for their loans.