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Alice H
Alice H, Solicitor/Partner
Category: Law
Satisfied Customers: 2850
Experience:  Partner in national law firm
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We have a secured loan that was taken out in 2006 for £25k.

Customer Question

We have a secured loan that was taken out in 2006 for £25k. This loan was regulated by the Consumer Credit Act 1974. The maximum of which is allowed (£25k).

They added the broker fee to the loan, making the loan total then £25,395.00.

My thoughts are that this would then make the loan invalid under the terms of the Consumer Credit Act?

I did previously question this. They state that the £395 has not been paid to us but charged to us via the broker. This is then paid by ourselves (Nemo) to the broker and added to your loan.

Thus making the loan £25,395.00.

The credit agreement signed is for £25,000 not £25,395
Submitted: 3 years ago.
Category: Law
Expert:  Alice H replied 3 years ago.
My name is Alex Hughes and I'm happy to help with your question today.

What do you wish to achieve by arguing this point?

Have you been making the repayments since 2006? Are there any arrears?
Customer: replied 3 years ago.

Hello Alex,


 


Sorry for the delay in replying.


 


All payments are up to date. In fact I asked to increase the payments to pay the loan off early only to be informed over payments are only allowed up to a max of £500.


 


If the loan given does not correlate with the credit agreement signed and if the loan is not valid. Basically, I'm asking if it's not valid then should I have to settle this debt and is it worth taking further.



Obviously they're a large bank with vasts sums of money and the best legal teams.


 


Kind regards


 


Matt


 


 

Expert:  Alice H replied 3 years ago.
Good morning


I can see the point your making but you're unlikely to be able to escape liability for the loan on the grounds of a defective credit agreement.

Under the Consumer Credit Act 1974 (as amended by the Consumer Credit Act 2006) - if you challenge the validity of the agreement the matter would usually end up in Court which would have to decide whether this is an 'unfair' agreement. If it is the Court has a number of options including reducing the amount payable or amending the agreement to comply with the CCA.

In light of the small amount that takes the agreement beyond the £25K limit (less than 2% of the overall amount), I think it highly umlikely that a Court would conclude that this agreement is unfair. Moreover, you have been repaying the loan for 8 years.

Obviously you can challenge the agreement if you wish but I think its going to be a very steep uphill struggle and ultimately you may end being out of pocket if lose e.g. legal costs etc.

Hope this helps.

Alex