Existing loan turns into HP agreement?

C

cjh

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A collegue of mine had a personal loan, then went to the bank for a car loan - they recommended that both loans be rolled into one, and this appears to be a Hire purchase agreement - my question is this surely when the 'loan' amount is in excess of the car value (personal loan + full value of new car) a HP agreement would be an inappropriate type of agreement?
 
I can't see how this could be done. By its very nature you can't have a hire purchase for a loan. I suspect it would be in breach of the Consumer Credit Act 1995 which sets out the conditions for loans and hire purchase agreements. I would also contact the irish Financial regulator authority by email or phone to check this further. If your friend has already taken out the HP agreement on the above terms there may be issues about it's enforcability should he choose to challange it.
 
Thanks Thrifty - those were my thoughts and I will direct them to the Regulatory authority.

Cjh.
 
Can you expand? Does the document explicitly refer to 'Hire Purchase'? With HP, the lender normally retains ownership of the item until the final payment is made - are the bank attempting to transfer ownership of the car to themselves?
 
RainyDay said:
Can you expand? Does the document explicitly refer to 'Hire Purchase'? With HP, the lender normally retains ownership of the item until the final payment is made - are the bank attempting to transfer ownership of the car to themselves?
Click to expand...


To be honest I can't remember the exact details - but if I get another chance I'll read it again.
 
cjh said:
To be honest I can't remember the exact details - but if I get another chance I'll read it again.
Click to expand...

In fairness, you should really confirm that you're correct on your HP assumption before thinking about referring anything to the Regulator.
 
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