More protection for borrowers

The Department for Business has today published proposals for draft regulations to take forward the implementation of the Consumer Credit Directive.

The Consumer Credit Directive will provide enhanced protection for consumers taking out new deals on credit and store cards and personal loans. This will include new requirements for lenders to promote responsible borrowing and lending, as set out in the recent Consumer White Paper.

Lenders will also be required to check a consumer’s creditworthiness before granting credit, explain financial products fully and grant consumers 14-day ‘cool off’ period during which they will be free to withdraw from the agreement.

The regulations will also see the implementation of requirements to provide transparent, standardised information, which it is hoped will consumers compare products, including the cost of credit on offer.

Consumer Affairs Minister Kevin Brennan said:

“These changes will build on the real help we’re already providing for homeowners, savers, pensioners and people with debts.

“Lenders will have to check creditworthiness and provide the information consumers need to make properly-informed decisions before they sign an agreement. Consumers will also have a new 14-day period within which they can opt out if they have second thoughts.”

If are considering taking out a loan and would like to receive advice from an expert before making your decision, TotallyMoney.com can help. Just visit http://www.totallymoney.com/loans and enter your details to be put in touch with a loans advisor who will talk you through your options and compare the market to find the best deal for you.