Write off Debt on Unenforceable Car Loans: Consumer Credit Act 1974 and Illegal Car Finance

Those that took out a car finance prior to April 1st 2007 have a realistic chance of being able to write off debt in relation to legally unenforceable car loans. There is a legal requirement that all car loan agreements must comply with the prescribed terms of the Consumer Credit Act 1974. Whilst it is difficult to quantify how many car loans aren’t compliant, the number is likely to be significant.

What is Necessary to Identify Whether an Unenforceable Car Loan Exists?

A fundamental part of the process to see if an unenforceable car loan exists is an initial audit of the credit agreement. Those that don’t have a copy of the car loan agreement can get this from the lender. There are two ways that this can be requested:

  • Under section 77-79 of the Consumer Credit Act 1974. This allows someone to get a copy of their car loan agreement for just £1. A cheque should be included with the formal request;
  • More detailed documentation can be requested for £10 via a Subject Access Request (SARN) under the Data Protection Act 1998. Although it takes longer to get this information, it is harder for the car finance company to comply with.

It is recommended that a debtor utilises the services of a professional solicitor to check the agreement. Although the prescribed terms of the Consumer Credit Act 1974 are reasonably easy to interpret to the trained eye, there are more esoteric reasons for an unenforceable car loan agreement.

When Might an Unenforceable Car Loan Exist?

  • The lender doesn’t have a copy of the car loan agreement;
  • The interest has been incorrectly calculated;
  • The credit charges (rate of APR) are deemed unfair;
  • The sale of a bad credit car loan to someone with a good credit rating;
  • A deposit has been paid for the car and this isn’t acknowledged in the car loan agreement;
  • No rate of APR is displayed;
  • There is no mention of any ‘cooling off’ period;
  • The car loan credit agreement hasn’t been signed by one or both parties;
  • The car loan is secured and this wasn’t stated on the agreement;
  • A person has been advised that they can only get a car loan if they take out Payment Protection Insurance (PPI).

It is estimated that in 25% of cases, the provider of the car finance is unable to provide a copy of the car loan agreement. If this is the case, the lender is not legally able to enforce it in a court of law. This would mean that it is effectively an unenforceable car loan.

Should an unenforceable car loan exist, it is possible to write-off the outstanding amount owed and receive a refund in relation to any car loan payments made. Others have received damages because the agreement is too one-sided in favour of the company offering the car finance.

Will a Successful Case Result in a Bad Credit Rating?

Proving that an unenforceable car loan agreement exists won’t worsen a credit rating. In many instances, consumers have already missed payments on car loans. Establishing that an unenforceable car loan exists may actually improve a credit rating because the credit report entry in relation to the car loan will be completely removed.

A consumer that has taken out car finance prior to the 1st April 2007 will be well-served by getting their credit agreements audited by a specialist solicitor. Should an unenforceable car loan agreement exist, because it fails to comply with the Consumer Credit Act 1974, any debt can be written-off. This can only serve to ease financial difficulties and alleviate personal debt problems.

How to select the best Payday loans

A payday loan is the best tool which can arrange the money. With the minimum requirements to furnish the details, you can get the money without any obstacle.

The only thing that you should have is the active bank account and a valid debit card. The company will be checking your employment and the monthly income.

On the basis of your payday check amount, you will be given the payday loan. The other thing they might be checking is the previous history of repayment of payday loans. In case of good history and high monthly income, you can also get the higher payday loan amount.

Why apply for payday loans

Now you must be thinking that why the payday loan is so famous among the majority of the people. There are many reasons behind it. Behind the popularity of the payday loan, the providers of such loans are working regularly. The companies are providing such loans without any complication.

The method of application is also very easy and there is no need for heavy documentation behind it. The cost of the application of such loans is also very low. You don’t have to bear the higher cost in this particular case.

Easy apply online

One more interesting thing is that you can apply for the payday loan online.  Most of the lending companies are available online with wonderful plans. A payday loan is appropriate for a very short-term period.

In simple words, it is suitable for the people who need quick money before the next payday check. In order to deal with some particular situations, you can use the payday loans. They will be helping you to deal with the medical emergencies, overdraft, and many other conditions.

How to select the right money lender?

Now you must be thinking that how to select the company for the best payday loans. Well, there are some particular things that you should take into your consideration to make sure that you are applying for the cost-effective option.

1-    You should check the rate of interest before applying for the payday loans. The best thing is that every type of information is available online and you can easily come to know about the minimum rate of interest.

2-    Repayment terms and conditions are the major issues that need your attention. You should check every single detail about the repayment terms. Give preference to a company which is more liberal in this case and willing to accept the payment in a very easy method.

3-    You should apply for the payday loan when you are sure that you will be able to pay them on time. In case you are not sure about the repayment on time, don’t apply for this.

4-    In some critical situations, the user may miss the repayment date. You should negotiate about this in advance with the company. Make sure that the company is giving you enough leverage in case of a delay in repayment.

5-    To get the complete report and detail analysis about the various payday loan lenders, you should do well research online. By doing this, you will be able to get the maximum information about this.

Doing the quick analysis

With the revolution in the IT sector, now it is quite possible that you will be getting maximum information about the best payday loan providers online. In some companies, it is seen that the amount of payday loan is different. It varies from the state to state.

A most common factor which is considered by the companies is the monthly income of the user.  An individual with the higher monthly income will have to more probabilities of getting the high amount by the money lenders as the payday loan.

No need for a high credit score

The other misconception that most of the individual has is that with the low credit card score they cannot get the loan. But it is not true in case of the payday loan. You can get the payday loan in even with the low credit score.

The companies will not go to check your credit score to provide you the payday loan. At the time of providing money, the money lender companies will consider the monthly income and the type of employment.

Installment option

In most of the cases, you will be asked to make the entire repayment in one go. But there are some good companies which may also give you an option to make the repayment of the payday loan in easy installments. To avoid any kind of confusion and chaos later, you should always ask about your options for the repayment of payday loans.