The unique offer is intended to reward ‘loyal’ loans customers who borrow from the bank and keep to the original terms and conditions of the loan, specifically the length of the repayment term.

However, Mr White argues that the loan has an unremarkable interest rate to begin with, so even the best buy rate offered when the cashback is included is by no means a market leader.

“At first glance this offer from HSBC would appear to be a great deal for consumers looking to take out a loan,” he said. “The cashback returned at the end of the loan can potentially reduce a mediocre typical APR of 6.9 per cent to a best buy at 5.3 per cent.

“However, for many borrowers this is just a ‘phantom offer’ that they will never be eligible for, as the cashback is only paid to them if they allow the loan to run for its full term,” Mr White continued.

“Given that a typical borrower is more likely to repay their loan early than see out the full term, this ‘incentive’ is immaterial,” he concluded.

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