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Interest charged on a cancelled agreement - valid?


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I cancelled an agreement with a loan provider some time ago, within the cancellation period of 14 days.

 

The loan provider is claiming interest from the time the loan was due until 54 days after that time. I have some questions:

 

1. It was my impression that no interest was due in the 30 calendar days immediately following cancellation. Is this correct? If it isn't paid within that time, does this 30 day period become chargeable for interest?

 

2. In the agreement, under the section detailing cancellation, there is no word of any provision allowing interest to be charged. There's mention of interest and applied rates in other sections on the agreement, but none of them talk about cancellation, and all are void in the event it is cancelled. Can the loan provider continue to add interest even though the agreement doesn't tell them they can?

 

The only thing the cancellation part of the agreement says about interest it "If you pay all of it before the first instalment is due, or if you are not paying in instalments, within 14 days after cancellation you will not have to pay interest or other charges." That's it. In another part of the agreement (under 'key information') it says "interest shall accrue from the day after signing this agreement until the loan is paid off in full", but since the agreement is cancelled, surely that becomes void?

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Yes they can charge you interest but only for as long as you kept the money.

 

If you returned it after 20 days they can only charge 20 days interest. It must be written on your agreement somewhere they will charge a daily rate.

 

unfortunately with payday loans it is almost pointless cancelling as the daily int rate will add up to almost the same (if not more, unless you return the funds before 30 days) as the original loan

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Wait, how are they within their rights to charge interest, though? The agreement is cancelled. The part of the agreement concerning cancellation allows no provision for them to carry on charging interest.

 

I'm not sure I understand what makes their interest charges valid :???:

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they are not giving anyone an interest free loan. Not sure who your agreement is with maybe they have made a mistake on thier credit agreements, but unlikely as they would have employed large and expensive solicitors to draw up their legal documents.

 

I have two agreement to refer to (wonga and month end money) and both state even if you cancel they can charge for services provided.

 

its all perfectly legal otherwise everybody could borrow xxx amount interest free for up to 44 days.

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How much was the loan for and how much are they charging you for it?

How long was the original agreement for?

I QUESTION THEREFORE I AM!! [sIGPIC][/sIGPIC]

 

Unfortunately i'm not an expert in any given field legally and my advice and that of the Consumer Action Group and the Bank Action Group is given without prejudice and without liability so please if in any doubt whatsoever seek help from an insured qualified professional. Contents of my posts are purely my own personal opinions and not condoned or endorsed in any way, shape or form by CAG. Thank you! :p

 

 

I have been smoke-free for 4yrs

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I can only comment on agreements I have seen, if yours states you can return the monies and there is no charge or interest payable then i cant see how they can charge you.

 

maybe you should ask them where in the agreement it states they can charge interest.

 

The cancelling issues is a catch 22, by agreeing in the 1st place to the credit agreement you are agreeing to their cancellation clause, which may or may not inc a paragraph about interest/fees.

 

The distance marketing regulations 2004 states they can make a charge for any service provided. By transferring the money into your account they have provised you with that service. its all legal and above board i'm afraid.

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