There are many different stages to the Green Deal – from having a Green Deal Assessment, to taking out a Green Deal loan and then repaying the loan through your electricity bills. Below we’ve put together all the key information that you’ll need to know before signing up to a Green Deal scheme.
To ensure you are on the best energy tariff for you home, use our independent switching site, Whichdeal.com to find the cheapest gas and electricity tariff for your home.
Ways to borrow – Green Deal and Low Cost Loans
You will need to go through a credit-checking process before taking out a Green Deal loan.
With Enhance Energy, to participate in the Green Deal, you can choose to take out a Green Deal loan, a Low Cost Loan or pay for energy-efficiency measures in full, should you have the funds available.
Green Deal loans
A Green Deal loan works differently to a loan from a bank or other credit provider: Green Deal loan repayments are added to your electricity bill. You repay the loan through your electricity bill payments (by direct debit, for example, if that’s how you pay).
One of the key aspects of the Green Deal is the ‘Golden Rule’ – loan repayments should not exceed the savings you make on your energy bills from the installation of measures recommended in your Green Deal assessment. So, in theory, you should see no increase in your total house hold energy bills.
However, the Golden Rule is not a guarantee that your bill savings will match your loan repayments. It is based on estimates of a typical household’s energy usage and savings, and doesn’t take into account future energy price rises.
Enhance Energy will advise you on the terms of your loan, such as how much you can borrow, how long you can borrow for, and the rate of interest you’ll pay.
The loan is attached to the property you live in, not you. If you sell your home, it will pass on to the new owner.
A Green Deal loan is not a loan or grant from the government. We will notify you of any other funding options available to you. For example, the Green Deal Home Improvement Fund (GDHIF) or the Energy Companies Obligation (ECO).
Green Deal interest rates
At the moment, the interest rates on Green Deal loans can vary. It will depend on which energy efficient measure(s) you choose to install in your home, how much finance is available for your home.
Loan Repayments are up to 25 years depending on the measure that the loan is taken out on.
With the Green Deal Finance Company, there is a one-off loan fee of £63.24 for every loan that’s taken out.
How Green Deal rates may increase
A Green Deal loan taken out over 25 years will have a higher APR than a loan taken out over 5 years.
Paying off a Green Deal early
You are able to pay the loan off early. It works in the same way as any other financial agreements. You will receive a settlement figure to pay the loan back in full at the time of the enquiry.
As for early repayment charges, from the 16th May 2014 the Green Deal Finance Company announced that it will remove any early repayment fees for future Green Deal loans taken out with it, thus not incurring extra charges, therefore there are no early repayment charges.
Other alternatives to a Green Deal loan
You don’t have to pay for home improvements through the Green Deal. You can pay for improvements from savings and other low cost loan options we have available. For more information, contact us today.