under 18 loan 2 March at 11:42AM in Loans 13 replies 857 views

roylynmouth

Am after some advice - my daughter was "given a loan by her company at the age of 17 (shes now 18) to help her commute to work. They take x amount out of her wages every month, and she still has approx 75% to pay back. However, we're in the process of moving away and although she's adamant she wants to carrying on paying the loan, they're asking for all of it up front. When she signed the agreement, neither of us parents were present and it was co-signed or guaranteed by anyone. What is her position do we think?

MorningcoffeeIV

It depends on the terms. If it doesn't say that it's immediately repayable on departure, she will have more chance of maintaining monthly payments, but it it probably does.

Can you lend her the money if she doesn't have it?

Neither of you need to co-sign or guarantee unless the company requested it.

TheMilkmansDad

What was the loan for the commute used for? A season ticket, car, bike?

If a season ticket and no longer used you can usually get a refund for the unused period and use that to pay back the loan.

comeandgo

I did not think under 18’s could get a loan.  Is it called a loan or advanced wages?

roylynmouth

that's my point - as she's under 18 surely it isnt a legal binding contract, just an agreement? It was towards a car btw @TheMilkmansDad I paid the rest.

roylynmouth

I should add, we've no intention of NOT paying it - just want ton see where we stand legally regarding the contract itself and the request for payment up front. That kind of implies she's tied to work for them regardless of where she lives or how her career develops

MattMattMattUK

roylynmouth said:

I should add, we've no intention of NOT paying it - just want ton see where we stand legally regarding the contract itself and the request for payment up front. That kind of implies she's tied to work for them regardless of where she lives or how her career develops

Without seeing the contract and seeing how it was structured we would be unable to tell you. You may be better talking to Citizen's Advice as her being under 18 may or may not be relevant. In terms of how these things normally take place they are not a "loan", but are a wage advance. 

elsien

roylynmouth said:

that's my point - as she's under 18 surely it isnt a legal binding contract, just an agreement? It was towards a car btw @TheMilkmansDad I paid the rest.

Could you not say the same about her employment contract then? Would you prefer to wait till she was 18 to get a job.

MorningcoffeeIV

roylynmouth said:

that's my point - as she's under 18 surely it isnt a legal binding contract, just an agreement? 

It surely would be. Just like her employment contract is legally binding, not just a casual agreement. 'Loans' via work are not FCA regulated loans. It will be treated as an addendum to her contract, an advance against future pay.

Emmia

roylynmouth said:

Am after some advice - my daughter was "given a loan by her company at the age of 17 (shes now 18) to help her commute to work. They take x amount out of her wages every month, and she still has approx 75% to pay back. However, we're in the process of moving away and although she's adamant she wants to carrying on paying the loan, they're asking for all of it up front. When she signed the agreement, neither of us parents were present and it was co-signed or guaranteed by anyone. What is her position do we think?

Is this a "loan" to allow her to buy an annual season ticket for the train, which is usually cheaper than buying monthly tickets?

Normally the repayments are taken from the pay packet, so if she leaves the job (because you're moving away) then there will be no pay packet to deduct from - hence the need to repay the oustanding balance all at once.  It's not a loan in the traditional sense, and it doesn't tie her to her employer for evermore.

Presumably her last pay packet won't cover the outstanding loan amount? 

The season ticket would also not be needed anymore, so she should be able to get a refund. Was the move not on the cards when she took out the loan? Did she / you fail to understand the repayment terms?

Edit: I see it's for a car, the argument here is she can /should sell the car to settle the loan.

silvercar

https://www.netlawman.co.uk/ia/entering-contract-minor