Paperless loans come into effect

Those applying for loans on the internet can do so without needing to sign and return paper copies of the agreement.

16:17 04 January 2005

Those applying for loans on the internet can do so without needing to sign and return paper copies of the agreement.

Before the start of the year people could apply for credit online, but still had to sign a paper copy of the deal before the contract was complete.

However, new rules brought in at the end of December mean consumers can complete the transaction electronically, meaning those with sight or mobility problems can use electronic tools to help read and complete the forms.

Lenders will still have to send hard copy letters when any charges for missed payments are imposed or if the agreement is cancelled.

Consumer minister Gerry Sutcliffe said: "We are undertaking the biggest shake-up of the consumer credit market for 30 years, making it relevant for today's market.

"Enabling consumers to complete credit agreements from the comfort of their own homes is a key part of this modernisation process. This new rule will improve consumer choice without removing any consumer protection, and save business time and resources."

People who enter into credit agreements online will have a 14-day "cooling off" period within which they can cancel the agreement.