If you've ever wondered if you can cancel a financial agreement while buying a car or how to get out of a car payment, here’s all the info you need.
Whether your economic circumstances have abruptly changed, or you simply no longer want the car you’ve bought, there are many reasons to want to stop funding. However, things might become a little more complicated when it comes to purchasing transport from a financial contract. Read on to know more! Have you ever purchased something and then felt like you made a mistake after a few days? This isn’t a problem with most small purchases, and you can usually return them.
How to Cancel a Car Loan Contract
When you have paid off your car or refunded it, your car loan agreement comes to an end. When it comes to changing your economical condition, the following solutions are your best bet.
- Pay off the balance of the loan in full
- Sell your car privately or to a dealership
- Refunding
- Trade in your Funded transportation.
Cancelling Car Funding Within 14 Days
A 14-day cooling-off period is included in all car funding arrangements. This means you have a legal right to cancel or withdraw from the contract within the first 14 days after signing it.
You must contact the lender directly to cancel your credit agreement within the 14-day cooling-off period. This is called ‘providing notice,’ and you are not required to give a reason for your change of mind.
If the money has already been deposited into your account, you must return it in full, and the lender must then give you 30 days to reimburse the money.
Cancelling Car Fudding After 14 Days
If you cancel your car funding after the 14-day cooling-off period, you’ll be effectively paying off the arrangement early and will be bound by the terms of the credit agreement.
Early repayment fees may apply to hire to buy car funding, conditional sales, and personal loans, but you will save money on interest if you pay off the agreement early.
If you cancel your funder in this case, your lender is likely to demand additional payments to cover the difference between what you owe and the car’s value.
You must contact the lender and request an ‘early settlement figure’ if you wish to cancel any credit agreement after the 14-day cooling-off period has ended. This is the total amount you’ll need to pay to cancel financial contract in full, including any interest and fees.
The lender will inform you of the amount you must pay to clear the debt, and you will have 28 days to complete the payment.
Requesting an early settlement figure does not imply that you must make the full repayment. Your credit agreement will continue as usual if you do not pay the settlement within 28 days.
You may also be able to pay off a portion of your project financing contract to minimize the amount of interest you owe. If you intend to do this, you need first contact the lender to determine the implications of making the payments on your present agreement.
Click here to learn about finance agreement between two parties
Can You Cancel a Loan Contract if Your Car Is in Negative Equity?
Negative equity occurs when the market value of your car is less than the settlement amount required to pay down the loan.
You can still cancel the arrangement if your car is in negative equity, but you’ll most likely have to pay the difference between what you owe and the car’s value. In this case, it’s critical to examine whether now is the ideal time to make a change.
Even though most car loan contracts are designed to ensure that the transport is in positive equity after the term, there is always the possibility that things will not go as planned.
