Loans 14 day cooling off period?

welshmatt983

If I took out a loan then decided I made a mistake and didn't want to commit to a loan. Could I cancel it within 14 days of signing?

If so, do they charge interest for those days or do you just pay the amount they gave you back? How does this affect credit rating? Would it show as settled or wouldn't get reported only the credit search etc?

molerat

Yes you can cancel.

You pay interest for the days the loan is outstanding.

If you exercise your right to cancel the loan should be removed from your credit file but the credit search will remain.

mab3000

I don’t believe that the loan would be completely removed/not appear on your credit file. Viewing credit profiles on a daily basis I do see credit products opened then closed after a few days, but then marked as settled. I would say that this is more likely to happen. 

I also remember one year taking out a loan in Apple for an iPhone a few years ago, but then returned the phone within the cooling off period, it was marked as settled but had stayed on my credit report only recently coming off after 6 years 

molerat

The CCA states that exercising the right to withdraw means the credit account should be treated as if it never existed so there should be no footprint of the actual account left on a credit file.

DullGreyGuy

mab3000 said:

I don’t believe that the loan would be completely removed/not appear on your credit file. Viewing credit profiles on a daily basis I do see credit products opened then closed after a few days, but then marked as settled. I would say that this is more likely to happen. 

I also remember one year taking out a loan in Apple for an iPhone a few years ago, but then returned the phone within the cooling off period, it was marked as settled but had stayed on my credit report only recently coming off after 6 years 

Did you explicitly contact Barclays, or whoever the finance house was at the time? 

If not then it naturally makes sense that it remains showing as settled as you didn't cancel but paid it off instead. Cancelling is an explicit act.