Guaranteed future value (GFV)
Key facts document
A credit agreement is a legal document that outlines the terms of your loan, between you and the lender.
Whether you’re taking out a mortgage, a personal loan or Car Finance, the creditor is legally required to provide a credit agreement and it must be signed by both parties.
Your credit agreement is drawn up by your finance provider and contains key details regarding your loan.
Once you receive your credit agreement, it’s important to read the information thoroughly to ensure you understand every detail of the agreement.
If you spot anything that you’re unsure of, you should always check it with your finance provider before signing.
All consumer credit agreements are regulated by the Consumer Credit Act 1974 (amended in 2006).
This legislation empowers and protects consumers by ensuring all regulated lenders meet certain trading standards.
The Act also provides you with certain consumer rights, including the right to a 14 day ‘cooling off period’, and the right to withdraw from an agreement if the information provided by the lender is deemed misleading or leaves the buyer unfairly out-of-pocket.
Once you have signed your agreement, the 14-day cooling off period gives you the right to withdraw from the agreement, should you change your mind.
If you choose to cancel during this period, you’ll need to repay the amount borrowed, plus any interest incurred. In most cases your deposit is refundable too, however if it’s non-refundable you may not be entitled to claim this back.
If you wish to cancel your agreement after the 14-day cooling off period, you’ll need to pay off the agreement first. To do so, you’ll need to request a settlement figure from your finance provider. This is typically the outstanding balance to date, plus the purchase fee.
If you’re circumstances change and you’re unable to continue your Monthly Payments, you should speak to your finance provider about your situation.
In most cases, lenders will work with you to reach a solution. This may involve reducing your monthly cost and spreading your payments over a longer period, or temporarily pausing your payments until you can afford to resume them again.
Alternatively, you seek expert help from a Free Debt Advice Service.
Check your eligibility today without affecting your credit score and receive an instant decision.