{"id":3071,"date":"2014-01-14T09:20:04","date_gmt":"2014-01-14T09:20:04","guid":{"rendered":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/?p=3071"},"modified":"2020-10-20T11:40:21","modified_gmt":"2020-10-20T10:40:21","slug":"hp-loan-differences","status":"publish","type":"post","link":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/hp-loan-differences\/","title":{"rendered":"Difference between HP and Loan"},"content":{"rendered":"\n

Many people purchase vehicles without clearly understanding whether the finance is provided via a HP agreement<\/strong> or an unsecured loan<\/strong>. There is an important difference.<\/p>\n\n\n\n\n\n\n\n

A vehicle acquired via a HP agreement is not your property \u2013 at least not yet. The words \u2018Hire Purchase Agreement<\/strong>\u2019 simply mean that you have entered into an agreement to hire the vehicle with an option to purchase. Accordingly you do not have the right to sell on such a vehicle. You may have paid a deposit or traded in your own vehicle as part of the Hire Purchase Agreement but that does not make you the owner of the vehicle. Documents provided when acquiring a vehicle via HP will normally be entitled \u2018Hire Purchase Agreement Regulated by the Consumer Credit Act 1974\u2019. An alternative title used in HP documents is \u2018Conditional Sale Agreement Regulated by the Consumer Credit Act 1974\u2019. These are both acceptable titles. <\/p>\n\n\n\n

\"Car<\/figure><\/div>\n\n\n\n

If however you purchase a vehicle financed in whole or in part by an \nunsecured loan then it is your property and you may dispose of it when \nand as you wish. Such an unsecured loan may be described in the loan \ndocuments as \u2018Credit Agreement Regulated by the Consumer Credit Act \n1974\u2019 or \u2018Fixed Sum Loan Regulated by the Consumer Credit Act 1974\u2019. \nNeither of these is a HP Agreement.<\/p>\n\n\n\n

The text of a HP agreement should include a section entitled \nTERMINATION: YOUR RIGHTS\u2019. This section confirms that you have a right \nto end the agreement and explains how you should go about doing so, if \nthat is what you want to do.  Furthermore, the text of a valid HP \nAgreement should also include a section entitled \u2018REPOSSESSION: YOUR \nRIGHTS\u2019. This section explains your rights in the event that the HP \nprovider wishes to repossess the vehicle. There are other standard \nsections in a valid HP Agreement and if the agreement in front of you \nticks all the boxes above, then it is highly likely that that is what it\n is. You will not become the owner of a vehicle acquired under a Hire \nPurchase Agreement until you have paid all the installments due under \nthe agreement and exercised your \u2018option to purchase\u2019 right at the end \nof the term of the agreement.<\/p>\n\n\n\n

In the event that you enter into an IVA or Individual Voluntary \nArrangement with your creditors, you will have to continue to pay the \nfull amount of the monthly HP premium. As a secured liability, the HP \nagreement is similar to a mortgage in that respect. The HP debt cannot \nbe entered into the IVA unless you default on your HP payments. In such a\n scenario, the HP provider would repossess the vehicle (according you \nyour due rights under the agreement) and any shortfall would be entered \ninto your IVA as an unsecured debt. At that point it would rank for \ndividend equally with all your other unsecured liabilities.<\/p>\n","protected":false},"excerpt":{"rendered":"

Many people purchase vehicles without clearly understanding whether the finance is provided via a HP agreement or an unsecured loan. <\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"none","_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","footnotes":""},"categories":[6],"tags":[],"class_list":["post-3071","post","type-post","status-publish","format-standard","hentry","category-general-debt-articles"],"_links":{"self":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/3071","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/comments?post=3071"}],"version-history":[{"count":3,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/3071\/revisions"}],"predecessor-version":[{"id":13544,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/3071\/revisions\/13544"}],"wp:attachment":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/media?parent=3071"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/categories?post=3071"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/tags?post=3071"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}