ADVICE COLUMN: Where do you stand if you can’t repay a doorstep loan?

Stock image - Money
Stock image - Money

If you have taken out a doorstep loan and cannot afford to pay it back, are you entitled to a refund if you think the lender didn’t carry out proper affordability checks?

The Financial Conduct Authority, which regulates the doorstep loan market, says a loan is unaffordable if you cannot make repayments without borrowing again.

Lenders must check your finances and situation to make sure you can afford to pay back the loan.

You might feel your agreement was unaffordable if you were given a loan that was more than you could manage to repay.

If you think you are owed a refund, complain to your lender. List the ways you think their affordability checks were not properly done, the problems this has caused, and what you would like to happen.

The lender must acknowledge your complaint and has eight weeks to respond formally or resolve your problem. If you are not happy with their response, or they don’t respond at all, you can complain to the Financial Ombudsman Service using a form on its website.

Should the lender agree with your complaint, they may write off the balance left on the loan or refund some of the interest you have paid.

If they don’t, and you have to take your complaint further, the Ombudsman can force the lender to write off the interest or even the remainder of the loan. The Ombudsman’s decision is binding on your lender.

If you need help with this or are not sure about your legal postion, contact Citizens Advice Derbyshire Districts for free, confidential and independent advice.

The office for Citizens Advice Derbyshire Districts is at Town Hall, Bank Road, Matlock, and is open from Monday to Thursday, 10am to 4pm, and Friday from 10am to 2pm. Alternatively, you can ring 03004568390 weekdays, from 9am to 4pm.