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Loan and Overdraft Disputes

When customers borrow money, lenders should ask the customer to sign a credit agreement. This agreement will form the contract between the lender and customer. The contract should define the terms and conditions of the parties’ agreement and both parties’ obligations.

Do you have a loan or overdraft dispute?

Our specialist banking and finance lawyers deal with numerous loan and overdraft disputes. We have detailed knowledge and experience, assisting in situations where customers might otherwise find themselves unfairly bound by the terms of their loan or overdraft.

There are a number of things to look out for, and be aware of, with loan and banking agreements, including:

  • Unusual or onerous terms: Were you unaware of these terms when you signed the contract? Or did the lender fail to fairly and reasonably bring these to your attention?
  • Unfair contract terms: This can include, for example, lenders unreasonably trying to exclude or limit their liability for breach of contract or unfairly shifting the balance of control in their favour.
  • Duress: If you were forced to enter into an agreement, or signed the contract under certain circumstances, of which the lender was aware, you may not be bound by its terms.
  • Inferring terms: A term must be properly incorporated into the contract. Lenders may try to add in a term after the contract has been finalised, or try to infer a term which could not reasonably be included.
  • Loan and overdraft disputes can also arise in situations when the lender has not acted as it should have done in accordance with the contract.

Claims can typically arise in the following scenarios:

  • Breach of contract: If the lender has breached any of the terms of the loan or overdraft, it could be argued that the agreement is legally unfair or the contract is unenforceable.
  • Statutory rights: Alongside the rules found within the credit agreement, you may also have legal rights under various legislation. There are certain legal procedures that a lender must follow when offering credit, and if they have failed to do so, you may no longer be liable for your payments under the agreement.
  • Breach of loan to value covenant: Lenders may unfairly re-value assets to put businesses into default of the terms of a loan arrangement relating to asset value.
  • Threats to call-in loans: Lenders may threaten to call-in loans in the event of a default. This can often be a stressful experience, which can however be negotiated between the parties.
  • Miscalculation of interest or charges: Borrowers may have been charged excess interest or unnecessary costs and fees in relation to a loan or overdraft.

How we can help

If you have a dispute in relation to a loan or overdraft facility, our banking and finance lawyers can assist you. Our lawyers have the knowledge and expertise to review your potential claim or query and advise on the most appropriate steps to take.

We always consider your individual circumstances to provide tailored advice at an affordable cost. We are able to offer ‘no win no fee’ costs arrangements and can arrange appropriate legal expenses insurance where appropriate.

 
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