After signing the contract

This section sets out your obligations and rights once you have signed a contract.

Cancelling a credit sale contract

If you haven’t received the goods yet, you have three working days (from the day after you receive your disclosure statement) to tell the lender in writing that you want to cancel the whole deal. If you want to make sure the letter gets there on time, deliver it to the lender yourself or send it by registered mail.

If you’ve already taken the goods home, you have three working days (from the day after you receive your disclosure statement) to write to the lender to cancel the credit part of the contract. You’ll still have to pay for the goods, as you can’t cancel the sale part of the agreement. After writing to cancel, you have 15 working days to come up with the cash price of the goods. The three working days start from the day after you receive the disclosure statement. Saturdays, Sundays and public holidays are not working days.

You can also cancel the credit part of the contract if the lender fails to send you a copy of the disclosure statement and other terms and conditions. Again, you’ll still have to pay for the goods.

If you bought the goods from a door-to-door salesperson

The Door to Door Sales Act 1967 provides a different, seven-day right of cancellation. If you bought your goods in a credit sale from a door-to-door seller, see Door to Door Sales.

Cancelling a loan contract

You have three working days to tell the lender in writing that you don’t want the loan (from the day after you receive your disclosure statement). You must give back the loan money and pay any costs. The three working days start from the day after you receive the disclosure statement. Saturdays, Sundays and public holidays are not working days.

You can also cancel the loan if the lender fails to send you a copy of the disclosure statement and other terms and conditions.

You can’t cancel a contract…

...if the loan or credit sale has a term of less than two months and you haven’t used any of the credit to pay the seller.

Repaying early

You can pay off the full amount owing on your credit sale or loan contract at any time. A full prepayment is where you pay in full the total unpaid balance of your contract before it’s due.

Some contracts may allow you to pay off some of the balance on your credit sale or loan contract early. This is called part prepayment.

If you make a prepayment, the lender may charge you a fee to cover their costs. These costs must be reasonable. You can ask the lender what costs you’ll have to pay if you repay your credit sale or loan contract early. They’re required to give you this information if you ask.

Refunds on insurance charges or premiums

The lender may have to refund any insurance premium you’ve paid. The amount you receive will be based on how early you’re repaying the balance – the later you repay, the smaller the refund.

Are there benefits in repaying early?

Before making a prepayment, check that it is worth your while. Compare the cost of repaying early with what you’ll save on interest, insurance and other costs.