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• Library > Legal Subjects > Banking and Financial Law > Buying on Hire-Purchase

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HOW MUCH CAN A FINANCE COMPANY CHARGE A HIRE FOR LATE PAYMENT ?

The hirer shall pay the finance company late charges at the rate not exceeding 8% per annum simple interest calculated on a daily basis or such other rate of interest as may be prescribed.

CAN A HIRER TRANSFER THE RIGHT, TITLE OR INTEREST TO ANOTHER PERSON UNDER A HIRE PURCHASE AGREEMENT ?

A hirer can transfer or assign the right, title or interest under the hire purchase agreement with the consent of the finance company or if the consent is unreasonably withheld, without the consent of the finance company.

A finance company cannot refuse a consent to an assignment on the ground that he requires other or additional guarantors to guarantee the assignee's obligation and shall be deemed unreasonable

• where the same guarantors who have guaranteed the hirer's obligation under the hire purchase agreement have agreed to guarantee the assignee's obligation under that agreement or
• where the assignee has furnished the same number of guarantors as was furnished by the hirer to guarantee his obligation under the hire purchase agreement as guarantors for his obligation under the hire purchase agreement.

If the hirer made a reasonable request to the finance company for a consent to an assignment by his right, title and interest, and the finance company fails or refuses his consent, the hirer may apply to the High Court for an order declaring that the consent of the finance company to that assignment has unreasonably been withheld.

Where an order is made by the High Court, the consent of the finance company is deemed unreasonably withheld.

There are certain conditions in granting a consent to an assignment of the right, title and interest of the hirer under a hire purchase agreement :

• all default payments under the hire purchase facility must be settled and
• hirer and assignee must pay any reasonable costs incurred by the finance company in stamping or registering the assignment agreement or counterparts or
• hirer and assignee to execute and deliver to the finance company an assignment in a form approved by the finance company whereby without prejudicing or affecting the continuing personal liability of the hirer in those respects the assignee agrees with the finance company to be personally liable to pay the installments remaining unpaid and to perform and observe all other stipulations and conditions of the hire purchase agreement during the residue of the term thereof and whereby the assignee indemnifies the hirer in respects of those liabilities