Cashpoint

The first ‘dynamic’ loan that rewards good financial habits is being launched today.

The LiveLend Reward Loan uses technology that monitors a customer’s credit score and reduces the interest rate on the debt as his or her score improves.

Rate cuts can happen every three months, with 2% shaved off the interest rate for every 25 points a credit score improves. LiveLend rates range from 9.9% to 36.7%.

While rates can come down, LiveLend says they will never go up – even if a borrower’s credit score deteriorates.

The firm, which uses data from credit check company Clearscore, estimates one in four people will benefit from rate drops in the first three months – and most can expect to see lower rates after 12 months.