Tag Archives: consumers
Car Loans : An Answer To Consumers' Dream of Financing A Car
An Overview of Credit Market
The car loans touching the cheaper graph have increased the level of confidence amongst the consumers to attain benefits with higher resale value.
While the signs of recovery in credit market has been observed, the time for consumers to see more signs of normalized lending in the showroom have also arrived.
The consumers seeking the replacement of cars have also gradually increased in the town. However, the biggest question is the consumers’ ability to buy, otherwise the market confidence has also risen with time. Hence, availing loan amount for car is not appearing as tougher as it was looking in last year.
Nevertheless, the credit tightening that was observed last year has been removed and now the consumers who were seeking the replacement of their cars could easily avail finance.
The Significance Of Car Loans
As the name implies, car loans are especially designed for getting your dream car financed. It can also be used for upgrading your old model into a newer one or you can also use the borrowed amount for meeting any bigger family purpose.
Therefore, you can get the most competitive amount based on your personal situations and financial behaviour. As a result, if you tend to fall under the category of an employee either from a company director to a self employed taxi driver, you are certainly eligible to borrow the desired amount.
Things to Consider
Nevertheless, if you are going for the car loan procedure, then you certainly need to keep few things in mind before making an online application. They are as follows:
Firstly, looking at the tight credit market, you need to be cautious about the APRs provided by various financial institutions like dealers, credit unions and banks. The interest rate might vary from one lender to another so, it is better to check out all lenders and go for the most competitive one.
Since, finance and insurance office are the main source of profit so never think of dropping your guards once you decide to work out financing.
Don’t forget to compare car prices and deals offered by various lenders. Applying online helps you in figuring out how valuable car you can afford.
Pay off the bills on time and should not open a new credit card several months before making an application for car loan and
Don’t forget to ask for a credit copy that certainly helps in assuring you that your credit history is correctly reported.
Benefits Of Car Loans
These loan amounts are backpacked with several mind boggling advantages. They are as:
Bigger borrowing is possible. Here, the borrower could attain the loan amount ranging from £1,000 to £25,000.
Fixed repayment schedules. The borrowed amount is to be repaid over the period of one to seven years that also reduces the level of stress while making monthly payments.
Therefore, car loans are the best possible mode of converting your dream car into a reality or molding the older one into a newer model.
Consumer Credit Act in UK
Consumer Credit Act of 1974, Chapter 39 states that it is An Act to establish for the protection of consumers ~ new system, administered by the Director General of Fair Trading, of licensing and other control] of traders concerned with the provision of credit, or the supply of goods on hire or hire-purchase, and their transactions, in place of the present enactments regulating moneylenders, pawnbrokers and hire-purchase traders and their transactions; and for related matters. [31st July 1974]
Consumer Credit Act 1974 is a consumer protection law in the UK which requires certain businesses to obtain consumer credit licenses. This Act protects any individual who receives credit up to £25,000. All appeals under the Consumer Credit Act need to be made to the Office of Fair Trading. This Act governs personal loans and other credit agreements.
Gist of the provisions of the Consumer Credit Act 1976
Any business offering credit agreements must obtain a credit license from the Office of Fair Trading, attaining which your business becomes a licensed credit broker
The customer must be aware of all the details of the agreement including interest rates
Customers must be provided with the exact details of the transaction including cash purchase price, details on how the credit price works out, all the monthly costs and what the final cost of credit is
Consumer Credit Act 1974 requires:
All agreements will be in writing
Full written details of the true interest rate (APR) should be quoted
Cooling-off period (which starts on the day customer signs, it varies for different goods and services) should be allowed during which borrowers might change their minds and cancel agreements
How does the Consumer Credit Act 1974 protect the consumer?
Consumer Credit Act regulates all those who are involved in offering credit. It enables the consumers to gain a better understanding of the nature of the agreements they are getting into. Consumers tend to get lured by attractive interest rates and freebies offered by lenders but this Act enables the consumers to make the best informed choice.
Consumer Credit Act also controls and regulates the activities of those who can provide credit under this Act. It also incorporates what steps a lender must take in case of default. This is not just limited to banks but also traders who offer goods on hire purchase and the various transactions they undertake.
This Act lays down rules which covers the form and content of all agreements, credit advertising, method of calculating Annual Percentage Rate (APR) and the procedures which will be adopted in the event of early settlements, defaults or even termination.
Consumer Credit Act 2006
Consumer Credit Act 2006 is the most significant change since Consumer Credit Act 1976. Although it received the Royal Assent on March 30th 2006, the key implementation dates set out are 6th April 2007 and 6th April 2008.
The key changes to the Consumer Credit Law along with its implementation dates are:
Removal of £25,000 financial limit (6th April 2008)
New definition of individual (Late 2006)
Retention of £25,000 financial limit for business lending (6th April 2008)
New business exemption (6th April 2008)
Interest on default sums (6th April 2008)
Minimum standard of post contract information (6th April 2008)
Unfair relationships (6th April 2007)
Licensing (6th April 2008)
Financial Ombudsman Service (6th April 2007)
Consumer Credit Appeals Tribunal (6th April 2008)
Enforcing credit agreements (6th April 2007)
Consumer Credit Act assures protection o people who enter into credit agreements.