Amigo Loans Extortionate rates

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  • King_Nothing
    King_Nothing Posts: 854 Forumite
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    Brooker_Dave wrote: »
    Parasites will get what's coming to them eventually.

    How exactly are they parasites?
  • MEM62
    MEM62 Posts: 4,754 Forumite
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    This is their business model. The loan is effectively given to people with a good credit history at rates applicable for those with a poor history. It's not new, it's obvious and I am still amazed that people are stupid enough to fall for it. (Although the advertising is clever)

    It is not illegal and there is nothing to report to the regulators. Taking advantage of peoples stupidity in this way is not unlawful.
  • lee111s
    lee111s Posts: 2,988 Forumite
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    Helvetica_Van_Buren wrote: »
    You haven't been mis-sold anything. The time for reading the interest rate was when you signed for it, not now.



    Who is claiming a mis sell?
  • ReadingTim
    ReadingTim Posts: 3,970 Forumite
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    lee111s wrote: »
    Who is claiming a mis sell?

    Stick around here long enough and you find "mis-sell" is often shorthand for 'didn't read the T&Cs/APR before I signed, only just realise what I've agreed to now it's gone pear-shaped and I need to blame someone else'. Often accompanied by moralistic indignation and threats to 'go to the ombudsman'.

    The correct spelling is "mis-bought"
  • Smodlet
    Smodlet Posts: 6,976 Forumite
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    lee111s wrote: »
    Who is claiming a mis sell?

    The OP implied it.
  • Gambler101
    Gambler101 Posts: 580 Forumite
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    Amigo's rates are high because they will basically lend anyone upto £5000, relying on guarantors to pick up the repayments in many of the cases.

    I would imagine a lot of guarantors simply refuse to honor their guarantee commitment, hence the need to charge quite a high APR to be able to turn a business profit.
    The instructions on the box said 'Requires Windows 7 or better'. So I installed LINUX :D:D
  • lee111s
    lee111s Posts: 2,988 Forumite
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    Smodlet wrote: »
    The OP implied it.



    The way I read it was that the OP realised how extertionate the rates were while filling in the forms. Not that they went ahead with it and had a sudden urge to check.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    Gambler101 wrote: »
    Amigo's rates are high because they will basically lend anyone upto £5000, relying on guarantors to pick up the repayments in many of the cases.

    I would imagine a lot of guarantors simply refuse to honor their guarantee commitment, hence the need to charge quite a high APR to be able to turn a business profit.

    Debt recovery is an expensive business. Even though the loans are guaranteed that is only a last resort after all other methods are exhausted. The lender cannot simply call on the guarantor the minute a payment is missed. Costs have to be covered. That's the nature of this market. Horses for courses as they say.
  • Helvetica_Van_Buren
    Helvetica_Van_Buren Posts: 270 Forumite
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    lee111s wrote: »
    The way I read it was that the OP realised how extertionate the rates were while filling in the forms. Not that they went ahead with it and had a sudden urge to check.

    I've re-read the original post and agree with what you're saying.

    To answer the OP's question: no, it;s not worth flagging with the ombudsmen. Amigo are offering a service and the interest rate is the cost for doing that service. There's nothing to flag.
  • MEM62
    MEM62 Posts: 4,754 Forumite
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    Gambler101 wrote: »
    I would imagine a lot of guarantors simply refuse to honor their guarantee commitment, hence the need to charge quite a high APR to be able to turn a business profit.

    I doubt that. The guarantor has to have good credit history. That suggests that (a) they are clued up and run their finances properly and (b) they would not risk their good standing by defaulting. The guarantor is more likely to pay than to trash their credit standing.

    In this way Amigo has established a business model that is high reward but relatively low risk.
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