card guide
Personal Loans And the Consumer Credit Act [Part 8]

Those who may be a little concerned about their legal rights under a personal loan agreement signed between them and the lender will be happy to hear that both unsecured and secured personal loans are, largely, regulated by the Consumer Credit Act 1974.

Now for the bad news, the maximum amount covered by the Consumer Credit Act is £25,000.  As such, if your personal loan is going to be for more than £25,000, you may not be covered by the Consumer Credit Act and should seek independent legal advice about what your legal obligations and rights are.  This issue becomes even more crucial when you bear-in-mind the fact that most personal loans granted in excess of £25,000 are secured personal loans, and most of the security provided is your home.

Check-list Of Personal Loan Issues

To conclude, the following is a short check-list of issues you should be considering when thinking about applying for a personal loan:

1.         How much do I want to borrow?

2.         Will I be covered by the Consumer Credit Act 1974 (maximum £25,000)?

3.         Am I happy to give security for the personal loan or would I prefer to have an unsecured personal loan?

4.         What will the administration fees for reviewing the application and setting up the personal loan account be?

5.         Will I need to pay the administration fees even if the personal loan is not agreed?  If not, how do I get a refund and how much will I get, e.g. all of it or only half?

6.         What will the interest rate be?

7.         If the interest rate is fixed, am I fairly certain that interest rates will remain either at that level or higher over the period of the personal loan?

8.         If the interest rate is floating, will interest rates likely go up during the term of the loan?

9.         Do I have a bad credit rating?

10.        If I do have a bad credit rating, will a bad credit rating personal loan help me to improve my credit rating and increase my chances of being approved a personal loan on more favourable terms later?


Posted on: [ January 05, 2018 ]       Add to Del.icio.us   Digg it   Add to Blinklist   Add to FUrl   StumbleUpon