Millions could sue over unfair loan

Millions of borrowers may be entitled to claim back a chunk of their loans because lenders have made mistakes with their contracts.

Some may even be able to wipe out all their debts because of the errors, which could leave banks facing a multi-million-pound bill.

The errors, which include miscalculating the annual percentage rate and fees for credit, were made in the small print of personal loans of between £5,000 and £25,000. Claims are more likely to succeed if payment protection insurance was sold with the loan.

Alan Kneale, of claims management website Unfair Made Fair, told Metro: 'There are undoubtedly thousands, if not millions, of other unfair loans out there still to be checked.'

Mistakes on the loan agreements could be a seen as a technical breach of the Consumer Credit Act. They can lead to borrowers paying back thousands of pounds too much.

Solicitor Rodney Gardner, who trains other lawyers in such cases, said: 'Most loans will not be sufficiently defective in law to guarantee claimback success but chances are increased if a PPI premium was added at the time the loan was arranged.

'Lenders are preferring to settle out of court if there is a case to answer.'