Loan law

 

If you take out a loan, law may or may not regulate the agreement you have with the lender. The principal piece of legislation which regulates loan agreements is the Consumer Credit Act 1974 (the Act). A number of consumer credit agreements are regulated by the Act, and normally it regulates the following types of loans and agreements: 

  • Hire purchase
  • Credit sale
  • Personal loans
  • Overdrafts
  • Loans secured by land mortgage
  • Credit card
  • Pledges

If a private company offers a loan, law may not regulate agreements or loans made with that private company. Therefore, it is advisable to take out a loan with an institution that is regulated under the Act. The Act requires the majority of businesses that offer goods and services on credit or lend money to consumers to be regulated by the Office of Fair Trading (the OFT). The OFT will aim to ensure that providers of loans do not unfairly exploit consumers.

If you are considering taking out a loan, law-regulated loans and agreements should be opted for. Loans which are regulated by the Act must comply with certain rules and regulations which ensure that consumers are offered loans on fair and competitive terms.  

If you have problems repaying a loan, you should seek the advice of a legal specialist as soon as possible. Legal advisors can advise you on both the legal and practical options available to you.

If you would like to obtain legal advice and information on the law relating to loans, Contact Law can put you in touch with a local specialist financial solicitor free of charge. So, if you have any questions or would like our help in finding local financial solicitors please call us on 0800 1777 162 or complete the web-form above.

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