Green Deal Loans

 

The Green Deal is innovative in the way the loan is paid back. The loan will be paid back through your energy bill (EDF, British Gas, Etc).

What we are all interested in however are the terms of the loan so we contacted the DECC and asked for some clarification. Whenever anyone takes out a loan it’s important to know what you are getting into and what the penalties are for terminating the loan early will be. Here is the response we got from the DECC:

“We want bill payers to have flexibility whilst at the same time ensuring that the cost of finance is kept as low as possible.  Where a green deal plan is regulated by the Consumer Credit Act 1974, consumers will have the option to repay the Green Deal Plan early, either in full or in part, under provisions that already exist in the CCA. 

To help keep the cost of finance as low as possible, providers will be able to claim limited compensation provided certain conditions are met.  This is in line with what is permitted by the Consumer Credit Directive. 

For business customers not covered by the CCA it will be up to individual Green Deal Providers to decide whether early repayment should be permitted and any associated charges that might apply.

The Green Deal provider must inform the customer of the early repayment rules, if they apply, and any fees before the contract is signed. This will allow customers the flexibility to choose whether they want to sign up to that Green Deal or not.”

From this we can conclude that like any other loan entered into it’s important to read the small print.  By allowing each Green Deal Provider to stipulate the terms of the early repayment there will be differences and competition between Green Deal Providers.  Competition between providers can be seen as a good thing as the market develops it will be easier to see the differences in the loans offered.

How low will the loans be is going to be the next piece of news everyone will want to know?  If the loans are below the market rate that can be accessed at the moment then the Green Deal is going to be an attractive option to both business and home owners.

What do you think about Green Deal loans? Do you have any pressing questions you want answers to? Comments below.

 

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