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Your rights when you borrow

UK law and FCA rules give borrowers important protections. Knowing them helps you spot unfair practice and act if something goes wrong.

Last updated 2 November 2026

The Consumer Credit Act 1974

The Consumer Credit Act 1974 (CCA) is the main law on regulated consumer credit. It sets rules on agreements, information you must be given, early repayment and your right to cancel in certain cases. The FCA now supervises most of the day-to-day conduct rules. You can read the Act on legislation.gov.uk.

The 14-day right to withdraw

If your agreement is covered by the Consumer Credit Act, you can cancel within 14 days of signing. Citizens Advice says covered agreements should say so at the top of the first page, and that personal loans, credit cards, payday loans, hire purchase, catalogues, store cards and buy now pay later agreements are usually covered. You tell the lender (writing is best). If you have already received money you must repay it, and the lender must give you 30 days to do so. Any interest you owe is explained in your agreement, so ask the lender. Agreements outside the Act are not covered, so check your documents.

Section 75

Under Section 75 of the CCA, if you buy goods or services costing between £100 and £30,000 using a credit card, the card provider can be jointly liable with the retailer if something goes wrong, such as the goods not arriving or the company going out of business. Paying by debit card can also offer help through the chargeback scheme, though that is a card-scheme process and not a legal right.

Paying off early

You have a right to repay a regulated credit agreement early, in part or in full. The lender may charge limited compensation for interest lost, within caps set in the rules. Ask for a settlement figure in writing.

Hire purchase and voluntary termination

Under a regulated hire purchase or conditional sale agreement, you can in most cases end the agreement and return the goods once you have paid at least half of the total amount payable, subject to the conditions and the care of the goods. Our car finance page gives more detail.

Fair treatment and affordability

The FCA requires lenders to assess whether you can afford the credit, treat customers in financial difficulty with forbearance and due consideration, and avoid unfair practices. Where you are in difficulty, speak to the lender early; they should discuss options, and free debt advice can help you plan.

Making a complaint

1. Complain to the lender or broker first. They must handle it fairly and promptly.
2. If you are not satisfied after eight weeks, or you get a final response you disagree with, you can take it to the Financial Ombudsman Service, which is free.
3. Keep copies of correspondence, agreements and payments.

Unauthorised firms

Dealing with an unauthorised lender may leave you with fewer protections. Learn how to check a firm is FCA authorised and read about loan sharks.

Missed payments and defaults

If you fall behind, the lender should send you a notice of sums in arrears and, before taking serious steps, a default notice that gives you at least 14 days to put things right. A lender cannot simply demand the whole balance without following the proper steps. Contact the lender as soon as you foresee a problem, say what has changed and ask what options exist, such as a reduced payment plan or a short pause. Keep a written record of what is agreed.

Debt collectors

Collectors must act reasonably. They should not harass you, call at unreasonable hours, or contact third parties about your debt. If a collector uses threats or misleading statements, you can complain to the creditor and the Financial Ombudsman Service. Always ask for proof of who they are and what they say you owe before paying.

This is general information, not financial advice. We're not a lender or broker and don't arrange credit.

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