Q&As

Does the settlement date (28 days/later date if requested) in the Consumer Credit (Early Settlement) Regulations 2004, SI 2004/1483, apply to loans secured over land? If the 28 days is calculated incorrectly or is not used, is the loan rendered unenforceable?

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Produced in partnership with Thomas Samuels of Gough Square Chambers
Published on LexisPSL on 29/07/2020

The following Financial Services Q&A produced in partnership with Thomas Samuels of Gough Square Chambers provides comprehensive and up to date legal information covering:

  • Does the settlement date (28 days/later date if requested) in the Consumer Credit (Early Settlement) Regulations 2004, SI 2004/1483, apply to loans secured over land? If the 28 days is calculated incorrectly or is not used, is the loan rendered unenforceable?

Does the settlement date (28 days/later date if requested) in the Consumer Credit (Early Settlement) Regulations 2004, SI 2004/1483, apply to loans secured over land? If the 28 days is calculated incorrectly or is not used, is the loan rendered unenforceable?

By way of background, pursuant to section 94(1) of the Consumer Credit Act 1974 (CCA 1974), a debtor under a regulated credit agreement is entitled at any time to repay the credit in full ahead of time.

The calculation of the settlement figure is ascertained by reference to the statutory formula provided for by the Consumer Credit (Early Settlement) Regulations 2004 (CC(ES)R 2004), SI 2004/1483, reg 4. In particular, the formula incorporates a statutory ‘rebate’ as provided for by CCA 1974, s 95(1). The purpose of the rebate is to reduce the total amount payable, as provided for by the terms of the agreement, in order to reflect the fact that the credit has been repaid early. At least in general terms, the earlier the credit is repaid, the greater the amount of the rebate.

Thus, the concept of a ‘settlement date’ was introduced to provide some certainty for creditors when applying the rebate formula. CC(ES)R 2004, SI 2004/1483, reg 5(1) provides that the ‘settlement date’ for the purposes thereof will be either 28 days after the date on which the debtor gave notice of intention

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