Amigo / FLM Loans - Guarantors Please be careful!!

Treadmill

MaxBrown wrote: »

Am I being completely naive here? I actually thought that for my circumstances it may be worthwhile.

My relationship has just broken down and we are selling our house - £120K outstanding mortgage, 50% shares for each of us, £160K asking price interest and initial offer at £150K. Due to my partner contributing very little financially I have a maxed out Barclaycard, can't get a loan anywhere and have just missed a mortgage payment (I pay all the bills etc....).
So I thought - borrow £4.5K over 5 years through Amigo and pay back earlier than that once house sale through. By my rough calculations that would - even if paying back in 12 months - be around 17% interest.
I know that my biggest risk is the sale of the house not going through, but surely that is the only risk?

Well as it is a guarantor loan there is effectively no risk to you, just the guarantor. Who I would suggest is probably going to end up paying the balance, if you are missing Mortgage payments now how likely is it you'll be able to keep up a loan and mortgage payments ? Speak to your mortgage company and make an arrangement is my advice, forget a rip off loan that will mire somebody else in debt with you.

MaxBrown_2

As soon as I had posted this I realised my error - not being clear about the purpose of the loan:
- to clear oustanding mortgage payment
- to pay off Barclaycard (at 29% apr)
- thereby enabling route to move into cheaper rented accommodation once house sale through.

So current relevant outgoings:
- £788 mortgage
- £130 Barclaycard

Interim outgoings:
- £788 mortgage
- 0 Barclaycard
- £180 Amigo

Clearly an increase of £50 per month which can be accommodated by cuts elsewhere (not the waffle of a person failing to recognise a problem!)

Income from house sale:
£10 - 16K dependant on realisation of existing offer
Timescale - ? but realistic expectation of within 12 months max.

New outgoings:
- c£800 rent deposit
- £500 rent
- 0 Amigo
- £? Barclaycard
In bank - £4 - 10K dependant on house sale.

Clearly the house sale and move has significant costs and I have pages of workings on this covering numerous eventualities.
Does this now make sense? I can't afford the deposit on a rental property until the sale of our house in completed and - provided the sale is above £140K (which is £10K less than going current rate on our street and we have a bigger garden and recent refurb) and that the sale is completed within 12 months (and both me and her wish to be as quick as realistic) then I actually cut interest expenditure.

*HalfBaked*

@MaxBrown Do you have someone that is a homeowner who would be your guarantor for the £5k?

Also, with regards to the consolidation part, using an Amigo loan to pay off your barclaycard will cost you more - your barclay card APR is roughly half what Amigo would charge you for the loan.

MaxBrown_2

Potentially do have a guarantor.

With respect to the Amigo interest rate - yes have spotted the catch now. I knew that there was something - I was reading the APR as being over the 5 year period forgetting what the "A" stood for!!!

What a fool I am for thinking that I may have found a way of beating the sharks at their own game! Although, I guess if the loan were taken out on 5 year terms but fully repaid in 1 or 2 months it would be competetive. But without a completion date on the house sale that's a risk that can't be taken!

stacey654

Well....just to say, although your views here are very negative, I have decided to go with Amigo loans myself recently.

I'm studying at university and had part of my course deferred due to illness, so as this is now after my third academic year I am unable to take any student loans. (I am no longer classed as a student as it will only take 6 weeks to complete this part of my course). I am only working part time and am offered no extra hours at work as they currently are having an overtime ban.

It just so happens that I am in need of a lump sum of money to fix my car, but have a poor credit history and have been refused loans from any high street lender. I have a good friend who has agreed to be a guarantor for me, herself and her husband trust me enough to do so (plus I live round the corner so there would be trouble for me if I did not pay) ha ha.

I don't think you should give the company so much negative attention when people like myself have this as their only means of obtaining credit and are willing to pay the high price as a result.

As mentioned by others previously....people can make their own choices on how to spend their money. And if they are able to repay early, they pay less. Amigo was my last resort and if it works, it works. I'm not complaining.

dealer_wins

stacey654 wrote: »

Well....just to say, although your views here are very negative, I have decided to go with Amigo loans myself recently.

I'm studying at university and had part of my course deferred due to illness, so as this is now after my third academic year I am unable to take any student loans. (I am no longer classed as a student as it will only take 6 weeks to complete this part of my course). I am only working part time and am offered no extra hours at work as they currently are having an overtime ban.

It just so happens that I am in need of a lump sum of money to fix my car, but have a poor credit history and have been refused loans from any high street lender. I have a good friend who has agreed to be a guarantor for me, herself and her husband trust me enough to do so (plus I live round the corner so there would be trouble for me if I did not pay) ha ha.

I don't think you should give the company so much negative attention when people like myself have this as their only means of obtaining credit and are willing to pay the high price as a result.

As mentioned by others previously....people can make their own choices on how to spend their money. And if they are able to repay early, they pay less. Amigo was my last resort and if it works, it works. I'm not complaining.

More fool them for:
A guaranteeing a loan that they will probably end up paying when you stiff them

and B: Being mad enough to guarantee you a loan, rather than borrowing the money themselves at a fifth of the rate and costs.

Still its not your problem is it!!!!

Apples2

I take it stacey isn't studying anything academic?

gb12345

Apples2 wrote: »

I take it stacey isn't studying anything academic?

Based on previous threads, I would say that she is probably studying to work as a senior Banker - she seems to have all the financial sense required.

Must go ring a few [STRIKE]idiots[/STRIKE] friends to see if I can find someone [STRIKE]stupid [/STRIKE]helpful enough to guarantee a high APR loan for me.

Eonel

Stacey.

You are being totally ripped off. You are paying 50% interest on a loan that should have only charge 10% interest.

If the loan is still active, please re-read and try to understand this thread.

Get you friend/guarantor to go to their high street bank and reborrow the money. Use this money to pay-off the Amigo rip-off before anymore interest is added.

Your friend makes the new & lower payments to their bank. You make the lower payments to your friend.

Everyone wins!

Mozette

dkmattnel wrote: »

One last thing. For this forums moderators. Is it possible to check if the user Apples2 is an employee or Associate of The Richmond Group? That response would good press reading if so.
Moderator?

If you read the T&C of the site/forum you would know that there are no moderators.