Cancelling a loan - Do I have any rights?

[cherylmarie]

Hi everyone

 

My husband and I recently applied for a secured loan for £30000 through Norton Finance - who got us the loan with Endeavour Personal Finance (part of Beneficial I think) Its a debt consolidation loan.

 

We signed the paperwork and sent it off. The next day we found out theres a chance my husband will be made redundant in the next couple of months so we thought it best not to carry on with the loan (at this point we didnt even know if the application had been accepted anyway). We got the cheques through a couple of days later and phoned up straight away to ask if we could cancel the loan.

 

They said its usually their policy to charge 6 months interest to cancel the loan and there is no 'cooling off' period, but if i write in and ask explaining the reasons they may consider not charging it.

 

I cant find anything in the T&Cs about cancelling, it just says the agreement is binding from the time of signing, and that by cashing the cheques I confirm that I fully understand and accept the details of the loan. (We havent cashed the cheques)

 

Can anyone advise if we are bound by their terms and if they state we must pay 6 months interest then we will have to pay it if we want to cancel? I have written to them asking nicely and explaining the situation with the redundancy etc so hopefully they may cancel with no charges. Obviously we got the loan because we are struggling financially and paying out 6 months interest would be crippling!

 

Thanks!

[powelll]

Did you sign the agreement on their premises or somewhere else? If you signed at their premises then unfortunately you have no statutory right to cancel. Any cancellation provisions must be allowed for in the T & Cs on the agreement itself... sorry!

[KeefG]

and that by cashing the cheques I confirm that I fully understand and accept the details of the loan. (We havent cashed the cheques)

 

That to me says you dont accept the details of the loan. I'm no expert on these matters but i'd say that as you havent cashed the cheques then you still havent recieved the loan.

 

Surely you cant be charged for something you've never had?!?!?!

[yaffsimone1]

Hi everyone

 

My husband and I recently applied for a secured loan for £30000 through Norton Finance - who got us the loan with Endeavour Personal Finance (part of Beneficial I think) Its a debt consolidation loan.

 

We signed the paperwork and sent it off. The next day we found out theres a chance my husband will be made redundant in the next couple of months so we thought it best not to carry on with the loan (at this point we didnt even know if the application had been accepted anyway). We got the cheques through a couple of days later and phoned up straight away to ask if we could cancel the loan.

 

They said its usually their policy to charge 6 months interest to cancel the loan and there is no 'cooling off' period, but if i write in and ask explaining the reasons they may consider not charging it.

 

I cant find anything in the T&Cs about cancelling, it just says the agreement is binding from the time of signing, and that by cashing the cheques I confirm that I fully understand and accept the details of the loan. (We havent cashed the cheques)

 

Can anyone advise if we are bound by their terms and if they state we must pay 6 months interest then we will have to pay it if we want to cancel? I have written to them asking nicely and explaining the situation with the redundancy etc so hopefully they may cancel with no charges. Obviously we got the loan because we are struggling financially and paying out 6 months interest would be crippling!

 

Thanks!

 

Im sure you can cancel it. You automatically have a ‘cooling off period’ in which you can change your mind. You can cancel the agreement if you signed it anywhere other than on the premises of the trader or creditor.

 

Somebody correct me if i am wrong...please

 

Oh they clearly say that by cashing of the cheques you accept the loan. You have not cashed them, so you have not accepted the loan so there is nothing to cancel.

[cherylmarie]

Hi thanks for all the speedy replies!

 

They posted out the forms to us and we signed them at home and posted them back.

 

I hoped we might be able to just cancel, especially as we havent had any 'actual' money from them. On the phone they stated that they were under no obligation to give us any cooling off period....maybe they were just fobbing me off.

[powelll]

They posted out the forms to us and we signed them at home and posted them back.

 

Great - is the loan amount below £25k? If so it should be a CCA regulated agreement.

you didn't sign on their premises therefore below info from tinternet should be useful:

 

If there is a statutory right to cancel, that is, if certain conditions have been met, there is a short period after an agreement has been made in which a client can change her/his mind and cancel. This is known as the cooling-off period and when it starts and ends is calculated by reference to the second copy or the notice received by the client.

Each agreement must contain information indicating the fact that the client has a right to cancel, how and when s/he can exercise this right and the name and address of a person to whom notice of cancellation may be sent.

If the credit provider is required to send the client a second copy of the agreement (for example, where the client signs an agreement which was not signed by the credit provider), the credit provider must send this by post to the client within seven days of the date when the agreement is made (that is to say, when the credit provider signs it). If a second copy is not required, (for example, where the client has signed an agreement which was already signed by the credit provider and a copy is given to her/him there and then) a notice, containing the information in the previous paragraph must be posted to the client within seven days of the date when the agreement was made (that is to say, when the client signed the agreement).

If the requirements in the previous paragraphs are not met, the agreement is not enforceable.

The cooling-off period starts when the client signs the agreement and ends five days after the client receives the second copy or notice.

If the second copy or notice is delayed in the post, this has the effect of prolonging the cooling-off period, since the cooling-off period does not start until the second copy or notice is received.

If the second copy or notice is either lost or was not sent in the seven-day period and the client wants to cancel the agreement, s/he should consult a specialist adviser, since the legal position is not clear.

It is up to the credit provider to prove that the second copy or notice was correctly posted.

The client must cancel the agreement, in writing, during the cooling-off period, by notifying the person specified in the second copy or notice. However, s/he could also notify one of the following (provided this person was involved in negotiations before the client entered into the credit agreement):-

• the credit provider (in the case of hire purchase, the 'owner'); or
  
• the trader, if s/he acted as the credit provider's 'agent' in arranging the credit (a supplier in a check trading agreement would not count)
   
  More about check trading agreements; or
  
• any person who acted on the client's behalf when arranging the credit, for example, a credit broking firm.
  

29

The client can either use a cancellation form, if provided, or write a letter explaining that s/he is exercising her/his right to cancel under the Consumer Credit Act 1974. The notification of cancellation must be posted within the cooling-off period. It takes effect as soon as it is posted, regardless of whether it is received by the credit provider and regardless of whether it is received after the end of the cooling-off period. It is advisable to send the notification of cancellation by recorded delivery or registered post, and to obtain a certificate of posting at the post office which will mean the client can prove the date of posting.

What happens when a credit agreement is cancelled during the cooling-off period

30

The client must take reasonable care of any goods which have been supplied on credit even where the credit agreement is cancelled during the cooling-off period. This duty continues for 21 days after cancellation. After 21 days the creditor cannot take legal action against the client if the client has not taken reasonable care of the goods. However, there are circumstances where the client's duty to take care of the goods continues.

30a

On cancellation, the client has a right to a refund of money s/he has already paid under the agreement. S/he can keep the goods until this refund has been paid. Once it has been refunded, the client has a duty to restore the goods to the creditor. If the creditor requests the return of the goods in writing, the client has to hand them over to the creditor who comes to collect them, as long as the written request is served on the client either before or at the time of collection. The creditor cannot insist on the client taking them or posting them back. However there are circumstances where the client should hand delivery or post the goods back. However there are circumstances where the client should hand-deliver or post the goods back.