Payday Loans - Agreement Cancellation?

[cluttermoney]

Here's an interesting thought.

 

Just been looking over the agreements for several payday loans and have noticed they all contain a cancellation clause within 14 days of making the agreement.

 

Hypothetically could you get such a payday loan - money gets paid into your account same day. Send letter saying you wish to excercise your right to cancel the agreement (in say 10 days by which time you've been paid) then just pay back the initial amount they advanced you and there for you avoid the excessive interest charges ?

[cluttermoney]

Here's the bit from the agreement:

 

" You have a right to cancel this Agreement for a period of 14 days, beginning with the day after this Agreement is signed by us. You can do this by giving us written notice to Express Finance (Bromley) Ltd, Kent House, 41 East Street, Bromley, Kent BR1 1QQ or fax on 0800 652 4662.

a. If you cancel the agreement you still have to repay any money lent to you and any administration fee (if applicable). If you do not exercise this right to cancel, you will not be able to cancel at a later date.

b. If you cancel this Agreement, within 30 days we will return any sums paid by you and you must refund any sums paid by us in relation to this agreement.

c. By signing this Agreement you request that we issue the credit prior to the expiry of the cancellation period, although you acknowledge that we are under no obligation to do so."

[katpuss]

Personally if I couldn't afford to pay the loan back then I wouldn't take it out in the first place.

 

I wouldn't play around with them as they can get quite nasty depending on what company you use.

[paydaypayback]

You have a right to cancel this Agreement for a period of 14 days, beginning with the day after this Agreement is signed by us. You can do this by giving us written notice to Express Finance (Bromley) Ltd, Kent House, 41 East Street, Bromley, Kent BR1 1QQ or fax on 0800 652 4662.

a. If you cancel the agreement you still have to repay any money lent to you and any administration fee (if applicable). If you do not exercise this right to cancel, you will not be able to cancel at a later date.

b. If you cancel this Agreement, within 30 days we will return any sums paid by you and you must refund any sums paid by us in relation to this agreement.

c. By signing this Agreement you request that we issue the credit prior to the expiry of the cancellation period, although you acknowledge that we are under no obligation to do so."

 

You have hit the nail on the head with this one and I HAVE done this before and it does work. I took out a loan with PTP because I had to and tried exactly what you have detailed and it does work. I WILL STRESS that you should only use this if you need a loan and have no other options ALSO it will not go well with the payday company so plan that they will remove the loan facility from you. Eg when I did this I had numerous previous loans with them but as soon as I cancelled and used this clause in the agreement they declined any application I made with them after.

 

You will find that with Poundstillpayday you have to pay back 50% of the interest fees and broker fees.

 

Basically if you HAVE TO get a loan this can effectively give you 44 days to pay it back in full with only half the interest and broker costs you would normally pay.

 

It was great when I cancelled the loan after having it 12 days (within the 14 days cancellation clause) and then the very next day I got a phonecall from an Irish PTP rep who asked when I would be paying back the money as I had cancelled the loan. Conversation went like this -

 

PTP - i am calling as you have cancelled your loan so we require payment of the balance and interest and broker fees.

Me- Thats not a problem I will be paying the loan in full with 50% of broker and interest fees as per your agreement

PTP - Can you make this payment now?

Me - No, I will be making the payment in 31 days time.

PTP - Why 31 days? You do realise this money is owed to us dont you.

Me - Of course and I also realise that as per your credit agreement I can cancel my loan within 14 days; which I have done and I then have 30 days to pay it back - which means I will pay you back in another 31 days as discussed.

PTP - But mmmm but sir mmm you cant do that

Me - Why?

PTP - Because its not allowed

Me - According to your credit agreement it is.

PTP - Why are you a lawyer now?

Me - Well Im not practising anymore but I do have a law degree - YES.

PTP - Oh well we will be in touch to arrange payment, you do realise don't you?

Me - Of course call me in 30 days time. Byeeeeeee

 

One last thing I will add though is that I have had previouse loans with Payday companies and I will advise you to STAY WELL CLEAR.