As with pre-contract information, there are rules on what should be in the credit contract document signed by the borrower. This document must also be clear, concise and easy to understand. However, there are types of credit contracts that the Consumer Credit Act does not cover. These include gas, electricity and water meter contracts, mortgages, credit unions and money borrowed by Dencern, to name a few. A borrower may terminate an open agreement at any time, subject to notice that may not exceed one month. As a creditor, you must have a minimum of two months` notice period to terminate the agreement, which must include fair reasons for termination. Some situations are excluded from this notice period, for example to prevent crime. A secured loan is a loan in which the borrower offers guarantees for the repayment of the loan, effectively reducing the lender`s risk. For example, real estate is used as a routine guarantee to obtain a home loan. Some credit facilities are secured, but many of them are not guaranteed. Consumers have the right to file a complaint with the Financial Ombudsman Service (FOS) against lenders and other credit companies. These provisions describe the various promises and statements that the parties made to each other. It also lists exceptions to these promises.
It is very important to look carefully at alliances, because our recent study found that a considerable number of credit contracts are formulated so that borrowers can transfer assets to be used as collateral from the hands of lenders. If you have purchased items but want to terminate the credit contract, you usually have to return the goods or find another way to pay for them. Pre-contract information must be provided in a timely manner prior to the conclusion of the borrower`s contract. This must be easy to understand and contain important financial information, including: Sarah borrows a car for $45,000 from her local bank. It accepts a 60-month loan at an interest rate of 5.27%. The credit contract stipulates that on the 15th of each month, she must pay $855 for the next five years. The credit agreement stipulates that Sarah will pay $6,287 in interest over the life of her loan, and it also lists all other loan-related expenses (as well as the consequences of a breach of the credit contract by the borrower). A case of delay is an act or omission that puts the borrower in default, for example. B failure to make a necessary payment or violate a clause in the facility agreement.