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Consumer Credit Act
My daughter's partner lives in Guernsey. He is a sole trader and essentially 'does up' cars. His business was having problems. He needed £25,000 but could not borrow from the bank as the banks in Guernsey require a guarantor who is a home owner is Guernsey. There was no such person.
My daughter worked for an insurance brokers which is a limited company. They offered to lend him the £25,000 and he entered into a contract with them on 7 August 2009.
The terms with respect to repayment state that [']interest is calculated on a daily basis on the amount of Loan outstanding at a rate equal to the Base rate for sterling deposits plus five and a half percent, that interest shall be payable at 12 monthly intervals or part thereof........['
['I]The Borrower shall repay the loan or any part hereof on receiving written notice from the Lender to do so, subject to repayment in full within 3 years of the date of this agreement.[/I]'
In fact he has paid £125 per month ,each month on time in respect of interest only.This method of repayment was agreed upon in an email shortly after signing the contract. The full £25,000 was to be repaid at the end of the 3 years.
However...my daughter has stopped working for this insurance company and they have send her partner an email , stating that they want repayment in full by 21 November 2010.
Questions I have are firstly, does the Consumer Credit Act as amended apply to this situation.
Is the lender entitled to insist upon early repayment?
If the answer to 2 is 'yes', are there any statutory requirements he must fulfil first.
I should have said, the loan is secured on the business assets and machinery.
Any help??
Thanks
My daughter worked for an insurance brokers which is a limited company. They offered to lend him the £25,000 and he entered into a contract with them on 7 August 2009.
The terms with respect to repayment state that [']interest is calculated on a daily basis on the amount of Loan outstanding at a rate equal to the Base rate for sterling deposits plus five and a half percent, that interest shall be payable at 12 monthly intervals or part thereof........['
['I]The Borrower shall repay the loan or any part hereof on receiving written notice from the Lender to do so, subject to repayment in full within 3 years of the date of this agreement.[/I]'
In fact he has paid £125 per month ,each month on time in respect of interest only.This method of repayment was agreed upon in an email shortly after signing the contract. The full £25,000 was to be repaid at the end of the 3 years.
However...my daughter has stopped working for this insurance company and they have send her partner an email , stating that they want repayment in full by 21 November 2010.
Questions I have are firstly, does the Consumer Credit Act as amended apply to this situation.
Is the lender entitled to insist upon early repayment?
If the answer to 2 is 'yes', are there any statutory requirements he must fulfil first.
I should have said, the loan is secured on the business assets and machinery.
Any help??
Thanks
