Ending a Credit Agreement
It should be once again pointed out that only certain types of credit agreements, made under certain circumstances have a statutory cooling off period. If you have signed an agreement in on trade premises, in the presence of the lender (or a party to the agreement), the contract is legally binding from the moment it is signed.
Ending a credit agreement
The Consumer Credit Act (CCA) gives the consumer the right to settle a fixed-sum credit (loan) agreement early, by giving notice to the lender and paying the outstanding sum in full. New regulations prescribe exactly how the outstanding sum should be calculated, so there should be no concerns of being ripped off by the lender. Furthermore, consumers have the right to claim a rebate of the charges for credit (less taxes, duties, fees or charges payable). The amount of the rebate is defined in the Act as:
…the difference between the total amount of the repayments of credit that would fall due for payment after the settlement date if early settlement did not take place
The settlement date for the purposes of calculating the rebate will generally be 28 days after the consumer notifies the lender of their intention to settle the agreement early, although this can be deferred.
Similar to s 77-79 of the Consumer Credit Act, s 97 allows the consumer to request a statement containing information pertaining to early repayment. Failure to do so within 12 working days renders to debt unenforceable until the statement is provided.
Terminating an agreement
In the case of HP or conditional sale, the agreement can be terminated at any time before payment of the last instalment, provided at least one half of the total price has been paid and reasonable care of the goods has been taken. For hire agreements the agreement can only be terminated after 18 months (unless an earlier date is mentioned on the contract).
- Consumer Credit Act Required Information
- Consumer Credit Act Consumer Rights
- Defaults, Arrears and Debt Collection Agencies
- Consumer Credit Act
Related posts:
If a car finance company offers “£1000 minimum part exchange” on your old vehicle no matter age or condition. And you receive less. Is this misleading or false representation?
James – I would say so, yes. See:
http://whatconsumer.co.uk/misleading-commercial-practices-unfair-trading-regulations-2008/
for more on this.
hi i need help i bought a car on finance and found out later on that my car has problems ive taken it back to where i bought and there trying hide the fact that there is a problem which i no there is because it affects my driving and i have 1 months warranty left i believe there trying to make excuses so my warranty runs out and im left with a car that has problems im sick of going back because they just dont seem to be helping me ive been back 6 times now what shall or can i do to solve this
hiya, i signed a contract with dfs for a sofa and a chair,i no longer want it because its not going to fit in the house,its too big.so i want to no if i can cancel it,but they said i cant, what are my rights.
when i spoke to the women from dfs on the phone she said the person who delt with you should of told you,you have two days to cancel.but i said the women who delt with me said no such thing.i told her il have to see a sclistor,she said you dont need to go that far.why not?
Hi. Can someone help?
I understand that you can walk away from a HP or a Conditional Sale agreement once you have paid off a certain amount of the balance.
I have a conditional sale agreement for a holiday lodge which is £100k over 15yrs and I am now 7 years into the agreement.
Can I simply hand back the keys and walk away without penalty or disruption to my credit history?
Thanks
hi, can someone help.
my hire purchase agreement is coming to an end. i have two months left of payments on my car. ive told them to come collect the car but im waiting for my v5 form because ive took my private reg off. they have told me i may need to pay another payment if the v5 form is not back in time.
can i just cancel the direct debit, so they then need to just collect the car
thanx
I am wanting to go travelling but have a HP agreement for 5 years, I am close to paying off 50% of the full amount owed and am wondering about voluntarily termination because I cant see any information about it in my agreement.
Thanks
my grandaughter has taken out finance for a second hand car, she has not made a payment yet, she has been told she is suffering from serious mental health problems so is not able to work now so will not be able to make the payments what can she do.