Amigo loans

James_B.

ArtyGirl80 wrote: »

Some very smug types on this thread.

My partner and I have a £500 Amigo loan, which we are paying back without a problem.

But you presumably would not need one had you not had problems in the past.

You do realise, don't you, that it would have been far cheaper had the guarantor taken out the loan themselves!

shireknight

What do they say? "an old fashioned idea from the good old days"

I remember the guarantor loans from days gone by and if all the loan companies stopped using that system then it must have been for a good reason so clearly not such a good idea.

CKhalvashi

shireknight wrote: »

What do they say? "an old fashioned idea from the good old days"

I remember the guarantor loans from days gone by and if all the loan companies stopped using that system then it must have been for a good reason so clearly not such a good idea.

Charging 35% interest for the risk of a prime customer (presumably when they're paying around 3% interest to lend that money out) seems a brilliant idea to me.

There are a number of sub-10% loans on the market, making it far cheaper for the guarantor to borrow it themselves and lend it to the person requiring the loan at the same rate, especially as they'll be the one making up the payments at the end of it if defaulted on.

dsk8016

KingElvis wrote: »

Guarantor loans, the last refuge of the financially baffled shyster....

The stories on here make me shudder, how people can rip of their own family and friends is beyond all belief...but the do, and plenty of them.

Hooray to people on the morale high ground!


we don't all get in to these loans to rip your family off! for some of us it was the only way to get a loan. Even though i am now in a difficult situation with them, this doesn't mean it was done as matter of fact from the offset.
I've had this loan 3 years and not missed one payment until recently when my circumstances changed. I do agree that they are shocking, as i offered them a solution to my arrears and they were just not interested, they were more interested in making my now 61y/o mum stump up the cash. I asked them to re-structure what was remaining in to a more managable chunk and lengthen the loan term....they said "that would be morally wrong for us to do as the loan would then run on for longer than the intended 5 years!" :mad::mad:
I am at a loss with them as in 45 days i will hit the 90 day arrears point where the legal team will get involved......they also don't tell you that your "30 day" cooling off period just gives them more time to start screwing you over! and that they still expect you to pay regardless.
Anyway rant over! i just don't think some of you should be taring everyone with the same brush.

Finally - S T A Y A W A Y F R O M A M I G O L O A N S

redpete

dsk8016 wrote: »

...they were more interested in making my now 61y/o mum stump up the cash.

Or, when you took out the loan, you were more interested in committing your now 61 y/o mum to make payments on your behalf without thinking what else could be done if your circumstances changed in the future.

CHR15

dsk8016 wrote: »

Finally - S T A Y A W A Y F R O M A M I G O L O A N S

That should really be aimed at your mum.

Don't believe the kids when they pressure you into "signing here".
Don't believe the claims of " don't worry about a thing, I will repay it all, I can easily make the repayments ".

Apples2

dsk8016 wrote: »

as i offered them a solution to my arrears and they were just not interested, they were more interested in making my now 61y/o mum stump up the cash.

They already had a solution, a solution you considered a great idea when applying.
They are only interested in getting your mum to stump up the cash because she agreed to make them when you failed.

It is doubtful your "solution" was anything like repaying the loan at the rate you and your mum agreed to so why would they consider anything less?

Rather than point the finger at Amigo, have a look where the other 4 fingers are pointing.

zxspeccy

Amigo Loans only need a guarantor as they feel the borrower has a higher probability of defaulting at some stage. The loans are for longer terms (1 to 5 years) so aren’t aimed at the payday lender market, and this longer term means an increased risk of default.

My friend asked me to be a guarantor on a £5000 Amigo loan, insisting all I was doing was giving him a “character reference”. When I read through the lending document and T&Cs this is what I found:

A guarantor has a legal responsibility to make the loan repayments if the borrower doesn’t (no shock there).

If the borrower breaks the agreement then the whole amount of loan and interest can be demanded from the guarantor. Failure to pay the loan in full would result in court action and a charge against the guarantor’s property. This is why Amigo requires the guarantor to be a homeowner to give them some leverage when demanding full repayment.

In the loan figure breakdown there was a “Broker’s Commission” payment of £400, which was added to the loan. This would work out at about £1000 in total over the course of the loan. In addition my friend paid £50 to the broker for the referral to Amigo as well.

Interest rate was 60%, when I can get one myself for around 8% from my bank.

The loan is actually paid into the guarantor’s bank account to be passed onto the borrower, which is supposedly to stop fraud.

My friend said this loan was for a car and made no indication of having any financial problems. I knew he was always short on cash but nothing major I thought. My friend was constantly chasing me for the paperwork, calling around my house pressuring me to sign it. All the time insisting there would be no financial liability on me. He said the urgency was due to needing the car to commute to work. Fortunately I declined but I can see how some people can feel obliged to help. Six months later my friend had his house repossessed, so obviously was in a lot of financial trouble. The Amigo loan might have in fact been needed to cover mortgage arrears. However as my friend never mentioned any of his to me, and had tried to mislead me with what a guarantor actually was, I don’t feel guilty at all about not helping him. In all likelihood he would have defaulted which would have put my own home at risk, the home where I live with my wife and daughter.

To be fair to Amigo this is all made clear in there paperwork to guarantors, and made clear on their website. However the problem is with the borrowers, as if any of them made it crystal clear to their potential guarantors what they were letting themselves into then they know they would likely get a no to their request. A lot of borrowers mislead the guarantors about what they are signing or “guilt trip” them into signing. Amigo also allows guarantors up to the age of 75, so this can mean a lot of elderly parents or grandparents can be pressurised by younger siblings in to “helping out”.

No doubt there will be people out there that will say that they have guaranteed loans for friend and family and had no problems. However the easiest way to decide whether to be a guarantor or not is to ask yourself “Would I lend them the money myself?” If the answer is a no then do not become a guarantor as it potentially amounts to the same thing.

theone45

I have used amigo for a small loan of £500. At the time i was struggling to keep the head over the water as too many outgoings at the time. They really helped me out. I knew that it was only a temporary situation and better than going for payday lenders. In total, i paid less than 80 quid interest on a year loan, because i paid extra a little every month. A £500 loan cost me around 580. Not bad really. U would pay more than 80 pounds on a payday loan for the same amount, to be paid in a month. If things went wrong i know i was going to ruin a good friendship and trust (guarantor), and that is not something i would want to do. But guess some ppl simply don't care. I would seriously doubt that i would put myself on a situation as a guarantor for someone else, unless it was my very close family or children.
In all, i thank amigo for helping me out when nobody else would (except for payday loans) and if you are wise you can clear the debt much faster and reduce the interest. You just have to know what you are doing...

ConsumerWizkid

High APR but actually Amigo Loans are a good lender if you stick to your agreement to actually pay as promised.

If your "circumstances change" it's up to you to sort that out and abide by your agreement.

When I was a young I mucked up my credit rating heavily without concern, borrowing from every lender I could find then hiding from the repayments. No good reason either, I just had little foresight at age 21. I spent about 5 years getting my credit file back to a barely average rating, that means even years later I still don't qualify for 7% loans, which is completely my own stupid fault.

One day a few years ago my "circumstances changed" so I went to Amigo one day to urgently replace a car and fund a house move, I talked my parents into guarantoring the loan which they didn't mind as I earn more than enough to pay the installments and understood my credit file situation.

I could have asked them for the money directly, but that's a much trickier conversation than asking them just to sign to show they trust that I will pay it, even though in some ways it's the exact same conversation. That's my choice and that of my guarantors.

Are Amigo's criminal for any part of the arrangement? Nope...I read the terms, as did my guarantors, and we signed it as it fitted what I wanted and what I wanted to achieve within the options available to me with the least stress involved.

Some people need to take some accountability and accept that if a business wants to offer £1000 loans at x% APR and someone signs an agreement saying that they will make the payments every month for a loan of that amount, it's the borrowers liability if they don't and that business will have a right to claim it's profits under the contract. It's kind of the entire point of contracts. Protect the consumer of course but a business has to be protected too.

No loan company will include a clause that says, pay us unless your circumstances change then we'll let you off, you poor dear.

I bet no one was whinging about Amigo loans being crooked when they got the money in their accounts.