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Nationwide doubles maximum personal loan to £50,000 – how does it compare?
The building society launches new borrowing tier to help fund home improvements
Nationwide is now offering the option of borrowing up to £50,000, over one to seven years, at a rate starting from 8.9% APR (representative).
The building society says it has doubled its maximum personal loan to reflect the impact of inflation and rising costs on consumers, particularly those wanting to carry out home improvements.
Here, Which? explains how the Nationwide £50,000 personal loan compares on rates and terms, and how much home improvements could add to the value of your home.
Please note that the information in this article is for information purposes only and does not constitute advice. Please refer to the particular terms and conditions of a personal loan provider before committing to any financial products.
Why has Nationwide doubled its max loan?
Nationwide upped the maximum limit on personal loans from £25,000 to £50,000 due to the impact of inflation and rising costs hitting consumers, particularly in the home improvements space.
Its research shows one in 10 rely on borrowing for home improvements, with a typical house extension costing between £45,000-£75,000.
However, more than half of those doing building projects have had to shelve their plans due to lack of available finances.
The building society also found that the most recent forecast from the BCIS (Building Cost Information Service) suggests there will be a 15% increase in costs over the next five years, meaning many households will be looking at steeper bills.
But the new £50,000 maximum limit isn’t just for home improvements. Nationwide told Which? customers can borrow up to £50,000 for any reason they might traditionally get a personal loan, including a new car or debt consolidation.
- Find out more: personal loans explained
Who can get the Nationwide loan?
Nationwide loans are only available to those who hold a Nationwide current account, but this isn't unusual for providers who offer loans of up to £50,000.
To be eligible you’ll also need to be aged between 18-79 and only have one existing Nationwide loan.
You can’t have missed three or more credit commitments in the last months, be bankrupt, or have any CCJs or individual voluntary arrangements (IVAs).
You’ll need to have a monthly income of at least £700 after tax, and if you’re self-employed, you’ll need to be able to prove a minimum of one year’s income through an accountant’s certificate, SA302 form or HMRC online tax calculation.
Customers can apply online, in branch or over the phone and receive the money the same day.
- Find out more: best bank and bank accounts 2024
How much would it cost to borrow £50,000 with Nationwide?
Nationwide is offering a fixed representative rate of 8.9% on loans from £35,001 up to £50,000 over one to seven years.
Loan APRs are 'representative', so you might not get the rate that the lender advertises. In fact, providers only have to offer their typical loan rate to at least 51% of borrowers who apply. So if you have a poor credit score, you might be charged a higher rate.
The highest rate you might be offered with a Nationwide loan is 29.9% APR.
Nationwide said that unlike other providers, it doesn’t apply an early settlement charge if you decide to repay the loan early.
Here’s how much it would cost to borrow £50,000 with Nationwide over one to five years at the representative 8.9% rate.
| Loan term | Representative APR (fixed) | Monthly repayment | Total amount repayable |
|---|---|---|---|
| One year | 8.9% | £4,362.28 | £52,347.36 |
| Two years | 8.9% | £2,274.06 | £54,577.44 |
| Three years | 8.9% | £1,579.67 | £56,868.12 |
| Four years | 8.9% | £1,233.74 | £59,219.52 |
| Five years | 8.9% | £1,027.18 | £61,630.80 |
Source: Nationwide
As you can see, borrowing for longer reduces the monthly payment you will have to hand over. However, borrowing for longer means the interest adds up and you end up repaying much more than what you originally borrowed. Borrowing over five years means you end up paying £11,630.18 in interest, but borrowing over three years costs £6,8668.12.
- Find out more: how to check your credit score for free
How does Nationwide's deal compare?
According to Moneyfacts data, only a handful of providers offer loans over £30,000.
We checked these provider websites to see what rates were offered on the maximum loan amount of £50,000.
We’ve ordered these providers by the representative fixed rate. However, you should keep in mind that you may not get the advertised rate.
| Provider | Representative APR on £50,000 loan | Early repayment charge | Eligibility |
|---|---|---|---|
| First Direct | 7.9% | Yes | Existing customers |
| Barclays | 8% | Yes | Existing customers |
| Bank of Scotland | 8.8% | Yes | Existing customers |
| Halifax | 8.8% | Yes | Existing customers |
| Lloyds Bank | 8.8% | Yes | Existing customers |
| Nationwide | 8.9% | No | Existing customers |
| NatWest | 9.9% | Yes | Existing customers |
We did not include loans that were only available to premier account customers or where the representative APR was not available on the provider website.
First Direct offers the lowest rates for a loan of £50,000, at 7.9%, but you’ll need to be a First Direct customer to apply.
In fact, all of the providers we looked at require you to be an existing customer to be eligible for the loan, with some even specifying you must have held your current account for at least one to three months.
Nationwide’s rate is competitive at 8.9% and, unlike rivals, it won't charge an early repayment fee if you pay back what you borrow before the end of the term.
- Find out more: best personal loan rates 2024
Is a personal loan the best way to borrow?
If you want to borrow a large amount of money, a personal loan might not be the best way to borrow.
Instead you should compare the costs of remortgaging your home as rates tend to be lower than those offered by loan providers.
Adding debts to a mortgage will allow you to spread repayment over the term of your deal – potentially decades, compared to the five or 10 years with a loan.
However, think carefully before you do this. As you're extending your repayment period, you'll be paying much more interest over the long term.
We’ve got all the information you need in our guide to how to remortgage to release cash from your home, and the best mortgage rates 2024.
Can home improvements add value to your home?
Some home improvements could add up to 25% to a property’s value, according to Nationwide’s 2023 special report.*
The report found that having more usable space is something people are prepared to pay for.
A 10% increase in floor space could add 5% to the price of a typical house, and adding space to create an additional double bedroom could add around 14% to the value of an existing two-bedroom house.
Meanwhile, a second bathroom could add 6% to the value of the average house.
The most lucrative home improvements such as a loft conversion and extension, which incorporates a large double bedroom and bathroom could add as much as 25% to the value of a three-bedroom, one-bathroom house.
Which? advice on home improvements
If you're planning on improving your home this year, Which? is here to help.
Our guide on house extension and conversion ideas can help you figure out how to add more space to your home.
You can also take a look at our step-by-step guide to loft conversions or our advice on how to buy the best garden room.
For design inspiration we have a kitchen ideas guide and you can use our guide to kitchen costs to help you make sure the numbers add up.
We've also found the best kitchen brands and best bathroom brands to help you avoid wasting money when kitting out your renovations.
Finally, check out Which? Trusted Traders to find a reliable trader to bring your home improvement project to life.
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Listen now*The analysis does not take into account gardens, nor can it adjust for other aspects which are often, by their nature, subjective. Data taken from Nationwide’s house purchase mortgage lending at the post survey approvals stage in the 12 months to June 2023.
