(This note is not part of the Regulations)

These Regulations entitle the debtor under a regulated consumer credit agreement to a rebate where all or part of the amount payable to the creditor is paid before the date on which it is due. The Regulations replace the Consumer Credit (Rebate on Early Settlement) Regulations 1983 ("the 1983 Regulations"), subject to a saving in respect of agreements entered into before the commencement date.

Regulations 4-6 differ from equivalent provisions in the 1983 Regulations. Regulation 4 incorporates an actuarial formula to be used in calculating the amount of the rebate, in place of different formulae provided for in the 1983 Regulations in relation to different cases. The Schedule contains examples which illustrate the application of the new formula. Regulation 5 determines the settlement date to be used in calculating the rebate. It differs from the corresponding provision of the 1983 Regulations in that the relevant date under that provision was generally determined by reference to the date of the next instalment due under the agreement. Regulation 6 provides for the settlement date to be deferred by a month (or, at the option of the creditor, 30 days) in the case of agreements for a term of more than a year. The 1983 Regulations provided for a deferment of two months in the case of an agreement for a term of up to five years, and a deferment of one month in the case of an agreement for a term of more than five years.