Short answer: under the FTC Cooling-Off Rule, if you buy goods or services for personal use from a seller who comes to your home, or at a place the seller uses only for a short time, you can cancel until midnight of the third business day after the sale. The price counts interest and service charges, and the rule covers sales of $25 or more at your home and $130 or more at other places. If you cancel, the seller has 10 business days to refund your payments, return any trade-in, return any note you signed and end any security interest from the sale. This page covers federal law only; other rules may apply where you live. It is general information, not legal or financial advice.
Which sales the rule covers
The rule covers a sale, lease or rental of consumer goods or services where the seller personally asks for the sale, “including those in response to or following an invitation by the buyer”, and you agree to buy at a place other than the seller’s place of business, such as your home, your workplace, a dormitory lounge, or a hotel room, convention center, fairground or restaurant rented for a short time (16 CFR 429.0(a), eCFR, text up to date as of October 28, 2026, read October 30, 2026). The purchase price must be $25 or more for a sale at your home, or $130 or more for a sale elsewhere, and the price includes “all interest and service charges” (429.0(a) and (e)). Consumer goods or services are those bought mainly for personal, family or household purposes, including courses of instruction or training (429.0(b)).
The FTC’s consumer page gives the same three days and the same dollar limits (FTC, dated September 2025, read October 30, 2026; this page may be out of date).
Sales the rule does not cover
| Not covered | Section |
|---|---|
| A sale made after you negotiated at the seller’s permanent store, where the goods or services are offered on a continuing basis | 429.0(a)(1) |
| A loan or sale that already gives you the federal three-day right to cancel for a lien on your home | 429.0(a)(2) |
| An emergency purchase you started, if you give the seller a separate dated, signed statement in your own handwriting that describes the emergency and waives the right | 429.0(a)(3) |
| A sale made entirely by mail or phone, with no other contact before delivery | 429.0(a)(4) |
| Repairs or maintenance you asked the seller to come and do; extra goods or services sold during that visit, beyond parts used for the repair, are still covered | 429.0(a)(5) |
| Real estate, insurance, and securities or commodities sold by a registered broker-dealer | 429.0(a)(6) |
| Motor vehicles sold at auctions, tent sales or other temporary places by a seller with a permanent place of business | 429.3(a) |
| Arts or crafts sold at fairs or similar places | 429.3(b) |
When the sale puts a lien on your home, the Truth in Lending right to cancel applies instead; see right to cancel a home equity loan.
What the seller must give you
- At signing, a completed copy of the contract or a receipt, in the same language as the sales talk, showing the date and the seller’s name and address, with a statement next to your signature that you may cancel before midnight of the third business day (429.1(a)).
- Two copies of a completed form headed “Notice of Cancellation” or “Notice of Right to Cancel”, filled in with the seller’s name and address, the date of the sale, and the last date to cancel (429.1(b) and (c)).
- An oral explanation of your right to cancel when you sign (429.1(e)).
The seller may not put in the contract a waiver of your right to cancel or a confession of judgment, and may not misrepresent your right to cancel (429.1(d) and (f)).
What happens to the financing
The notice form the rule requires says that if you cancel, “any payments made by you under the contract or sale, and any negotiable instrument executed by you will be returned within TEN BUSINESS DAYS” after the seller gets your notice, “and any security interest arising out of the transaction will be cancelled” (429.1(b)). Within those 10 business days the seller must refund all payments, return any trade-in in substantially as good condition, cancel and return any negotiable instrument you signed, and take the steps needed to end any security interest (429.1(g)).
The seller also may not sell or assign your note or other evidence of the debt to a finance company or other third party before midnight of the fifth business day after you signed (429.1(h)). If the contract was later assigned anyway, or a lender paid the seller for you, ask the lender in writing how it will handle your cancellation. The FTC Holder Rule may let you raise the claims and defenses you have against the seller with whoever holds a consumer credit contract; see the FTC Holder Rule.
Counting the days, only for the math
This example is only for the math, and the dates are example dates with no federal holiday in between. Under the rule, a business day is any day except Sunday and federal holidays, so Saturday counts (429.0(f)). You sign on Thursday, April 1, 2027.
| Step | Date |
|---|---|
| Business day 1 | Friday, April 2, 2027 |
| Business day 2 | Saturday, April 3, 2027 |
| Business day 3 (the Sunday in between does not count): cancel by midnight | Monday, April 5, 2027 |
| The seller may not assign your note before midnight of business day 5 | Wednesday, April 7, 2027 |
| The seller gets your notice | Wednesday, April 7, 2027 |
| 10 business days later: refund, trade-in, note and security interest due | Monday, April 19, 2027 |
How to cancel
The notice form says to “mail or deliver a signed and dated copy of this Cancellation Notice or any other written notice” to the seller’s address by midnight of the date on the form (429.1(b)). The FTC suggests sending the form by certified mail so you get a receipt, postmarked before midnight of the third business day (FTC). Keep a copy of what you sent.
The goods
Within 10 business days after it gets your notice, the seller must tell you whether it will pick up the goods or leave them with you (429.1(i)). You must make the goods available at your home in substantially as good condition as when you got them, or follow the seller’s instructions to ship them back at its expense and risk. If you make them available and the seller does not pick them up within 20 days of your notice, you may keep or dispose of them with no further obligation. If you do not make them available, or agree to return them and do not, you stay bound by the contract (429.1(b)).
If the seller does not honor it
Failing to honor a valid cancellation is an unfair and deceptive practice under the rule (429.1(g)). You can report it at ReportFraud.ftc.gov, and complain about a lender or finance company at consumerfinance.gov/complaint. For your own case, ask a lawyer; you can look for legal aid through the Legal Services Corporation.
Related guides
A personal loan you took out yourself is a different case; see can you cancel a personal loan. Solar panels sold at the door are covered in solar panel financing vs personal loan.
Questions to ask before you sign
- Where are my two copies of the cancellation notice, and what is the last date to cancel?
- Who is financing this, and will my contract be sold to anyone else?
- What is the total price, including interest and service charges?
- If I cancel, how and when will my down payment and any trade-in come back?
Checklist
- Bought at home ($25 or more) or at a temporary location ($130 or more): you can cancel within three business days.
- Saturdays count; Sundays and federal holidays do not.
- Cancel in writing, keep a copy and proof of mailing.
- The seller has 10 business days to refund, return your note and end any security interest.
- A home-secured loan has its own right to cancel instead.
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Sources
- eCFR: 16 CFR Part 429, Rule Concerning Cooling-Off Period for Sales Made at Homes or at Certain Other Locations, current text up to date as of October 28, 2026
- FTC: Buyer's Remorse: The FTC's Cooling-Off Rule May Help
- FTC: ReportFraud.ftc.gov
- CFPB: Submit a complaint
- Legal Services Corporation: Find legal aid
Disclosure: Modern Lending Solutions is not a lender, loan broker or agent for any lender or loan broker, and does not make credit decisions. Any compensation we receive is paid by participating lenders, only for advertising services. This guide is general information, not financial or legal advice.