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A Beginner’s Guide To Credit Agreements

The key is in the details. Giving yourself enough time to understand the terms of your contract is essential to ensure that the nature of the agreement you are entering is right for you. We have put together this guide to help you understand a credit agreement with a responsible lender.

What is a credit agreement?

A credit agreement is a legally binding contract made between the borrower and the creditor. The agreement typically outlines the terms of repayment, the fees, all the conditions and requirements associated with obtaining the credit and your consumer rights. Both parties must agree to the terms of the agreement and show their consent of entering into the contract by signing it.

Your credit agreement should not be confused with the Standard European Consumer Credit Information (SECCI), which is also known as Pre-Contract Credit information. Lenders must give you a copy of this document during the application process for credit to explain the key features of the product.

What are your consumer rights?

Most credit agreements are covered by the Consumer Credit Act and must include your rights when entering into the agreement. Your creditor must give you a written copy of the agreement clearly outlining:

Some credit agreements such as mortgages, utility provider agreements or loans from your employer are not regulated by the Consumer Credit Act.

Cancelling a credit agreement

You can cancel a credit agreement regulated by the Consumer Credit Act without giving any reason within 14 days of signing the agreement, however you must give notice to the lender that you are cancelling your agreement within this period. You can give your notice in writing or verbally, however it is always best to have a written record that both parties can refer back to. In the event of cancelling the contract you will need to repay the amount of money you borrowed and the interest for the days you held the money.

Is Polar Credit covered under the Consumer Credit Act?

Polar Credit is a direct lender and we offer a credit line solution to our customers for their ongoing borrowing needs. As a responsible lender we are authorised and regulated by the Financial Conduct Authority and our Credit Agreement is regulated by the Consumer Credit Act 1974 for running account credit.

Before reviewing and signing your Polar Credit Agreement you will receive Pre-Contract Credit information, also known as SECCI, which will outline the key features of the Polar Credit Line. Provided that you are happy to proceed with your application you will receive our credit agreement to review and sign, unless we are unable to approve your application at that point in time.

In our credit agreement you will find details of the terms and conditions of using the Polar Credit Line, including the rate of interest, the Annual Percentage Rate of Charge (APR), your credit limit, the total amount payable, the repayments, the default charges, other charges, early repayments, the terms of withdrawal and other conditions related to entering the agreement.

More Information

What is Polar Credit?

What is the cooling off period for Polar Credit?

How do I end my Polar Credit agreement?

If you have other question, please visit our FAQs or Contact us