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Car Loan Promissory Note Template for England and Wales

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Key Requirements PROMPT example:

Car Loan Promissory Note

"I need a Car Loan Promissory Note for a £25,000 loan to purchase a new BMW, with monthly repayments over 5 years and an interest rate of 6.5% APR, to be signed by March 2025."

Document background
A Car Loan Promissory Note serves as a fundamental financial instrument in vehicle financing transactions under English and Welsh law. This document is typically used when an individual or entity requires financing to purchase a vehicle and agrees to repay the loan according to specified terms. The promissory note includes essential details such as loan amount, interest rate, payment schedule, and the vehicle's details serving as security. It must comply with various regulations, including the Consumer Credit Act 1974 and FCA requirements, and provides legal protection for both the lender and borrower.
Suggested Sections

1. Parties: Identification of borrower and lender including full legal names and addresses

2. Background: Brief context explaining the loan purpose and vehicle purchase

3. Definitions: Key terms used throughout the document including 'Vehicle', 'Loan Amount', 'Interest Rate', etc.

4. Principal Amount: Statement of the total loan amount being borrowed

5. Interest Rate: Specification of the interest rate, calculation method, and total interest payable

6. Payment Terms: Details of payment schedule, frequency, and method of payment

7. Vehicle Details: Specific information about the financed vehicle including make, model, VIN, and registration

8. Security Interest: Terms establishing the lender's security interest in the vehicle

9. Default Provisions: Consequences and remedies in case of default

10. Signatures: Execution block for all parties including witnesses if required

Optional Sections

1. Late Payment Provisions: Additional terms regarding late payments, penalties, and grace periods

2. Prepayment Terms: Conditions and calculations for early repayment of the loan

3. Insurance Requirements: Specific insurance requirements and minimum coverage levels for the vehicle

4. Assignment: Terms regarding the ability to assign or transfer the loan

5. Governing Law: Explicit statement of jurisdiction and applicable law

Suggested Schedules

1. Schedule 1 - Payment Schedule: Detailed amortization schedule showing all payment dates, amounts, and interest portions

2. Schedule 2 - Vehicle Specification: Complete technical and legal description of the vehicle including condition report

3. Schedule 3 - Insurance Requirements: Detailed insurance specifications and certificates

4. Schedule 4 - Notice of Security Interest: Form for registering the security interest in the vehicle

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓƵ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions






























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Relevant Industries
Relevant Teams
Relevant Roles
Industries

Consumer Credit Act 1974: Primary legislation regulating consumer credit agreements, including requirements for form and content of credit agreements, disclosure requirements, and borrower's rights and protections

Financial Services and Markets Act 2000: Establishes regulatory framework for financial services, including requirements for authorized lenders and consumer protection provisions

Consumer Rights Act 2015: Governs fairness of contract terms, transparency requirements, and general consumer protections in contracts

FCA Regulations: Financial Conduct Authority regulations including consumer credit sourcebook (CONC), responsible lending requirements, and guidelines for treatment of customers

Bills of Exchange Act 1882: Sets out basic requirements for promissory notes and their enforceability provisions

Unfair Contract Terms Act 1977: Governs limitations on exclusion clauses and reasonableness requirements in contracts

Consumer Protection from Unfair Trading Regulations 2008: Establishes prohibitions on unfair commercial practices and disclosure requirements in consumer transactions

Data Protection Act 2018 and UK GDPR: Outlines personal data handling requirements and privacy provisions that must be considered in financial agreements

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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