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In today’s fast-paced world, it’s not uncommon to make financial decisions that we might later regret or wish to change. Whether it’s a loan you no longer need or a purchase that doesn’t quite fit, understanding your rights to cancel a loan or credit agreement is crucial. In the UK, these rights are designed to protect consumers, providing a safety net in situations where they change their mind. This comprehensive guide will walk you through the process of cancelling a loan or credit agreement, ensuring you’re equipped with the knowledge to make informed decisions about your finances.

Understanding Your Right to Cancel

The decision to take out a loan or enter into a credit agreement is significant, and it’s understandable that circumstances might change, leading you to reconsider. Recognizing this, UK law offers protections that allow consumers to cancel certain agreements within a specific timeframe.

When Can You Cancel?

Most credit agreements in the UK come with a cooling-off period, typically 14 days from the day the agreement is signed or when you receive a copy of the agreement, whichever is later. This period gives you the right to cancel without having to provide a reason.

Types of Agreements Covered

  • Fixed-sum loan agreements: Personal loans where you borrow a fixed amount and repay in instalments.
  • Running-account credit: Includes credit cards and store cards where the credit is not fixed and can be varied.
  • Hire purchase agreements: Where you agree to purchase goods through instalments, with the option to own the goods at the end of the agreement.
Can I still cancel my loan if the 14-day period has passed?

Steps to Cancel a Loan or Credit Agreement

Cancelling a loan or credit agreement requires you to notify the creditor within the cooling-off period. Here’s how you can do it:

  1. Written Notification: It’s advisable to cancel in writing, providing a clear statement of your intention to cancel the agreement. Include your name, address, and details of the agreement.
  2. Return of Funds: If you’ve already received the loan or goods, you’re required to repay the money or return the goods within 30 days of cancellation.
  3. Cancellation Fees: Check your agreement for any applicable cancellation fees. While the law permits cancellation, some agreements may include fees for early termination.

If you’re in Northern Ireland, contact Consumerline.

How do I draft my cancellation notice?
Consumer: 30 off of 14

Changing Your Mind About a Purchase

In addition to financial agreements, consumer protection laws in the UK also cover situations where you change your mind about a purchase. This includes goods bought online, over the phone, or via mail order, which are covered by the Consumer Contracts Regulations, allowing you 14 days to cancel the order after receiving the goods. You might have paid VAT, customs duty or delivery fees to get the item delivered. You can apply for a refund of the fees on GOV.UK.

How do I cancel my order and get a refund?

Contend: Simplifying Legal Guidance

Navigating the complexities of cancelling a loan or credit agreement can be daunting. That’s where Contend steps in. Our AI legal assistant is designed to provide clear, concise, and personalized legal guidance. Chat with Contend, and within minutes, you’ll have the answers you need to understand your rights and obligations when considering cancelling a loan or credit agreement.

What are my rights if I want to cancel my loan or credit agreement?


Cancelling a loan or credit agreement is a right that UK consumers have, providing a layer of protection in financial dealings. By understanding your rights and the process involved, you can make informed decisions that best suit your financial situation. Remember, if you’re unsure or need guidance, Contend is here to help, offering expert advice at your fingertips.

Take control of your legal and financial decisions today. Chat with Contend’s AI legal expert and navigate the complexities of loan and credit agreement cancellations with confidence.

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This material is for general information only and does not constitute
tax, legal or any other form of advice. You should not rely on any
information contained herein to make (or refrain from making) any
decisions. Always obtain independent, professional advice for your
own particular situation. Contend Inc is not regulated by the
Solicitor’s Regulation Authority.