Cooling off period - changed mind

mikopaul

Hi

I am looking for some urgent advice please .....

Just over a week ago I took out a loan for a new car with Black Horse finance. The APR of 11.3% was significantly higher than I believed I could get elsewhere but I was informed of the 15 day cooling off period so I went ahead with the loan.

I subsequently called Black Horse up to cancel within the period, which they accepted. Unfortunately, and I haven't been able to get an explanation why (as I know that I can service the loan easily, am a home owner and have a good credit history), I was then rejected for a personal loan. I don't want to apply again for any others in case it damages my credit rating.

When Black Horse accepted my cancellation they gave me a quote to settle the account that was valid for 7 days. This period comes to an end tomorrow. I have just received a letter from Black Horse today saying that I need to settle up by tomorrow or the Credit Reference Agencies get informed etc. I had assumed that I had to make the payment to trigger the cancellation otherwise the agreement remained in place. I can't speak to them until tomorrow. Does anyone know if I can change my mind after requesting a cancellation in the cooling off period and simply keep the loan in place?

I realise that I have been slightly naive and should have arranged the cheaper loan before triggering the cooling off - but I thought I should cancel the original one first.

nelly12

No you are legally not allowed to change your mind once you have notified them of the cancellation. They have a legal process to follow and so do you. I am fairly sure that they will hand this straight to their legal department if you can't pay the funds when required. You have 30 days to do this from when you tell them that you wish to cancel. I can understand why the finance houses are being quick to pass this onto their legal teams to recover the money as there are costs involved in firstly setting up your loan and then the process of recovering it. Sorry it's not better news.

Xbigman

Also, you took out a loan and then cancelled. When you then applied for a second loan the first loan was almost certainly still on your record, which is why the second loan failed.



X

immoral_angeluk

Cal blackhorse and see if they will reinstate it. Doubtful, but worth an ask.

mikopaul

All

many thanks for the advice .... I double checked the contract and realised that I legally have 30 days to pay so when I spoke to them today, I quoted the agreement and they confirmed that this was the case. Apparently the statement in the letter that I had 7 days before they would refer me to credit agencies etc is just an automatically generated letter and they wouldn't do anything for 30 days as the account is not in arrears.

They also confirmed that they would reinstate the loan on the original terms with my first monthly debit being taken as planned if I want to do that.

Xbigman - I think that your suggestion about the loan appearing to double up may well be the case and was concerned about appearing to double up on the loan in the eyes of the credit companies - but had hoped that by triggering the withdrawal in advance of applying for the second loan it would show up as being cancelled.

All in all a good result - I have a couple of weeks to find out whether it is worth attempting to finance it more cheaply or just continue with the current agreement. No problems with Black Horse at all - just learning how the credit agencies actually work in terms of what they see when you apply for a loan.

Thanks again

jonnyd281

mikopaul wrote: »

I have a couple of weeks to find out whether it is worth attempting to finance it more cheaply or just continue with the current agreement.

Are you sure? if you are outside the cooling off period (and given that you said that you are already seven days from when you decieded to cancel last time) then you will most likely end up paying all the early repayment charges, you might want to check your contract to see what it says about these.

Apples2

mikopaul wrote: »

I double checked the contract and realised that I legally have 30 days to pay so when I spoke to them today, I quoted the agreement and they confirmed that this was the case. [snip]
they wouldn't do anything for 30 days as the account is not in arrears.

You need to tread carefully. You have 30 days to make your payment, this is correct because after 30 days the NEXT payment is due. This would be classed as a LATE PAYMENT and not a MISSED PAYMENT i.e in arrears. A late peyment will still be recorded negatively against you (but it isn't as bad as a missed payment).

mikopaul wrote: »

but had hoped that by triggering the withdrawal in advance of applying for the second loan it would show up as being cancelled.

doesn't work like that unfortunately. They simply record the fact that a SEARCH has been conducted on your file. they have no idea if you accepted, got rejected or cancelled it.

mikopaul wrote: »

They also confirmed that they would reinstate the loan on the original terms with my first monthly debit being taken as planned if I want to do that.

If this is still on the table, I would suggest you grab it with both hands, any other option may not be good for your credit file. Your recent search sounds like it may have already affected your file, more searches will simply make things worse. Even if you get accepted somewhere else, the interest rate may not be as good.

You need to balance the risk, going elswhere might work, but if it doesn't this could unfold into a complete mess.

mikopaul

all

many thanks for the feedback - I am planning on just sticking with the current loan (thanks Apples2 - agree that the risk of going for a cheaper loan and potentially affecting my credit rating if it doesn't work out outweighs the potential benefit of a lower rate)

Even though I am confident that there isn't any danger of them doing anything until 30 days after the date when I triggered the withdrawal (there was a 15 day withdrawal period and a payment period of 30 days from triggering the withdrawal) - I will confirm within the next couple of days....

Next time I get a loan I will make sure that I sort the best loan out in advance rather than assuming I can sort it out retrospectively!! Expensive lesson.... fortunately, however, I should be in a position to pay much of it off later in the year cutting down on the interest charges - and I have checked out all the early settlement conditions (and the legislation) and there are definitely no penalties other than a potential 2 month additional interest payment after the point of settlement...

thanks again