Legal & rights
Understanding a credit agreement
What's actually in a UK credit agreement, which clauses matter most, your cooling-off rights, and how to spot a bad deal before you sign.
6 min read → Legal rights
Your rights as a borrower
— what the law says
A clear guide to your statutory protections when taking out a personal loan in the UK, from signing to settlement.
5 min read • Cash Train editorial team
Important: Cash Train is an unregulated lender
This guide explains statutory rights that apply to regulated consumer credit agreements. Cash Train is not authorised or regulated by the Financial Conduct Authority. The Consumer Credit Act 1974 statutory protections and the Financial Ombudsman Service do not apply to Cash Train loan agreements. Your rights with Cash Train are contractual — set out in your loan agreement.
Why this matters
UK consumer credit law gives borrowers some of the strongest protections in the world. Understanding these rights before you sign — and knowing how to use them if something goes wrong — puts you in a far stronger position than simply hoping a lender treats you fairly.
The Consumer Credit Act 1974 — your foundation
The Consumer Credit Act 1974 (CCA) is the bedrock statute governing personal loans, credit cards, hire purchase, and most other consumer credit in the UK. Every regulated credit agreement must comply with it — if it doesn’t, the agreement may be unenforceable against you.
Key protections under the CCA:
Pre-contractual information
Lenders must give you a Standard European Consumer Credit Information (SECCI) form before you sign. This sets out the APR, total amount repayable, repayment schedule, and your right to withdraw.
Signed copy
You are entitled to a copy of any regulated credit agreement. If a lender fails to provide one within 12 working days of a written request, they cannot enforce the agreement while the default continues.
Section 75 protection
If you use a credit card (or a linked personal loan) to buy goods or services costing between £100 and £30,000, the credit provider is jointly liable with the supplier if something goes wrong. This is particularly powerful for purchases from overseas retailers.
Time orders
A court can issue a time order giving you more time to pay if a lender tries to take enforcement action. This can reduce your monthly payments to a level the court considers fair.
The 14-day cooling-off period
Under the Consumer Credit (EU Directive) Regulations 2010 — which implement EU rules now retained in UK law — you have an unconditional right to withdraw from most personal loan agreements within 14 calendar days of signing, with no penalty and no reason required.
How it works in practice
Scenario: You take out a £1,500 personal loan on 1 June. On 10 June — still within the 14-day window — you decide you’d prefer to use savings instead.
- Notify the lender in writing before the 14-day deadline expires
- You must repay the principal (£1,500) plus any interest that accrued between drawdown and repayment
- You owe nothing further — no early repayment charge, no admin fee
- The lender must process the withdrawal within 30 days
Note: the cooling-off right does not apply to certain agreements, including some bridging loans and mortgage-linked credit. For standard personal loans it always applies.
Your right to repay early
Section 94 of the CCA gives you the right to repay all or part of a regulated consumer credit agreement at any time. Lenders cannot refuse early repayment, and any excess interest must be rebated to you.
Early repayment charges — what’s allowed?
For most personal loans the lender may charge an early repayment charge (ERC), but it is strictly capped by law:
More than 12 months remaining
1%
Maximum of the amount repaid early
12 months or fewer remaining
0.5%
Maximum of the amount repaid early
Scenario: You have £800 left on a loan and 8 months remaining. You decide to repay it now. The maximum ERC the lender can charge is 0.5% × £800 = £4. The rebate on future interest you would have paid far outweighs that cost in most cases.
Hardship standards — what good lenders do
The Financial Conduct Authority’s Consumer Duty (effective July 2023) and its CONC sourcebook require regulated consumer credit lenders to treat borrowers in financial difficulty fairly. These are enforceable obligations for regulated firms. Cash Train is unregulated, so FCA hardship obligations do not apply to us as a matter of law — but we voluntarily meet these same standards. If you contact us in difficulty, you will receive the same treatment as described below.
Sympathetic treatment
Lenders must engage constructively with customers experiencing genuine financial difficulty. Blanket refusal to discuss arrangements is a breach of FCA rules.
Breathing space
Under the Debt Respite Scheme (Breathing Space), you can apply for up to 60 days of legal protection from creditor action while you get debt advice. Lenders must freeze interest and charges during this period.
Affordability reassessment
If your circumstances change materially, you can ask a lender to reassess whether your loan remains affordable. They cannot simply ignore this request.
Signposting
FCA rules require lenders to point you towards free debt advice services. This is mandatory, not optional.
How to complain effectively
If a regulated lender treats you unfairly, you have a clear escalation path below. The process is free and does not require a solicitor. For Cash Train complaints specifically: we aim to resolve all complaints within 8 weeks. If unresolved, you may seek independent legal advice or contact Citizens Advice — FOS jurisdiction does not apply to our unregulated loans.
Step 1
Complain to the lender directly
Write to the lender’s complaints team. They have 8 weeks to provide a final response (15 business days for payment services complaints). Keep copies of all correspondence. Reference the specific FCA rule or CCA provision you believe they have breached.
Step 2
Financial Ombudsman Service
If you are unhappy with the lender’s response — or they fail to respond within 8 weeks — you can refer your complaint to the Financial Ombudsman Service (FOS). It is free to use, the lender cannot charge you, and FOS decisions are binding on the lender up to £430,000. You have 6 months from the lender’s final response letter to refer.
Step 3
FCA and trading standards
You can report a lender’s behaviour to the FCA (via their consumer helpline) or to Trading Standards via Citizens Advice. These bodies do not award you compensation directly, but they can investigate and take regulatory action.
Useful contacts: Financial Ombudsman Service — financial-ombudsman.org.uk / 0800 023 4567 • FCA consumer helpline — 0800 111 6768
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Common questions
FAQ
Cash Train is an unregulated lender, which means Consumer Credit Act 1974 statutory protections (such as the right to early settlement notices and Section 75 protection) do not automatically apply by law. However, Cash Train provides equivalent contractual rights: a 14-day withdrawal right, the right to repay early with no penalty, and a complaints procedure with access to an independent adjudicator.
Yes. We provide a contractual 14-day withdrawal right from the date you sign. To exercise it, notify us in writing within 14 days. You will owe interest only for the days you held the funds — no penalty, no questions asked.
If you are unhappy with our service, contact us at [email protected]. We will acknowledge your complaint within 24 hours and aim to resolve it within 8 weeks. If you remain dissatisfied after our final response, the Financial Ombudsman Service does not cover unregulated lending, but we work with an independent adjudicator for escalated complaints.
Yes. If you are experiencing financial difficulty, contact us promptly. We will discuss your situation and may offer a payment deferral, reduced-payment arrangement or temporary interest freeze depending on your circumstances. We do not add fees for this. We also point customers to free debt advice services.
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