Amigo / FLM Loans - Guarantors Please be careful!!

Tiddlywinks

FinanceForEveryone wrote: »

So you don't think that in the vast majority of cases, if you have a Guarantor that is a homeowner, they are not perfectly positioned to be able to get a loan themselves from their bank and lend it to their friend, or relative, at a much lower interest rate than Amigo Loans are offering?

In my view it's a redundant and overtly profiteering service. I just wish more people would realise this, and in particular, on money saving forums like this not try to defend what companies like this are doing :-( !!!

What??? To do this would reduce the would-be guarantor's ability to get a loan for themselves - should they need it - for the duration of the liability they have taken on for someone else.

I am NOT defending the company, just defending their right to operate a money-lending business within the boundaries of UK legislation... and defending the right of individuals to exercise free will in deciding whether or not to borrow from said company.

Tiddlywinks

Just has a look at this 'objectionable' company's website.

Here are the answers to some of the FAQs:

What is a guarantor?

A guarantor is someone who agrees to pay the loan back, if the borrower can't.

A guarantor needs to be a homeowner, aged 18-75, who hasn’t had trouble paying bills in the past. It’s really important that they can afford to cover the monthly payments as well as having enough money to live their normal life.

We believe friends and family know each other better than a credit score ever can. If you trust each other, so will we.

If you’re thinking about becoming a guarantor, please click here to make sure it’s the best option for you.

So, a person thinking of becoming a guarantor can then click on the 'click here' button to find out more.

That link takes you to a process chart which is VERY clear about the risks involved in helping out a family member or friend.

Actually, I thnk they deserve points for transparency.

spacey2012

I love the advert.. Old fashioned style loans, you wont even need a credit check !
No but the fool guaranteeing it ruddy well will !

FinanceForEveryone

...oh their website, the same website which on the front page has the audacity to announce:

"We're not a bunch of bankers and we're not in it for the money."

hmmm? Then why not charge 20% APR? Also:

"We're an eclectic bunch of designers, software engineers and researchers and we're here to make stuff work."

...as if there operation isn't mainly made up of call-centre staff and collections teams?? Do you really believe that?

The BBC have already criticised the owner of Amigo loans, James Benamour, as "making a fortune by misleading people over loans" and oh look...he's still at it, trying to mislead people on the front page of their website.

FinanceForEveryone

Tiddlywinks wrote: »

What??? To do this would reduce the would-be guarantor's ability to get a loan for themselves - should they need it - for the duration of the liability they have taken on for someone else.

Do you really think this?

Underwriting a high interest Amigo Loan, for a much more riskier applicant than yourself, will definitely reduce the guarantor's ability to get a loan for themselves. This is a standard question when getting out a loan from your bank: "Are you currently acting as a guarantor in any capacity and if so please provide details..."

It's better for the borrower and the lender to by-pass these kinds of loan sharks and do this themselves - it seems common sense to me and an obvious money saving decision, but obviously not to everyone. As I said before, what Amigo Loans are providing is in effect a redundant service, similar to these debt consolidation companies that don't provide any value-add over and above what the citizen's advice bureau offer, except they charge you for it!

jonesMUFCforever

I firmly believe there is always two sides to a story - if everybody paid back what they had agreed to pay on time there would be no need for anyone from Amigo loans or any other company to contact you at all.

meer53

FinanceForEveryone wrote: »

s I said before, what Amigo Loans are providing is in effect a redundant service, similar to these debt consolidation companies that don't provide any value-add over and above what the citizen's advice bureau offer, except they charge you for it!

If you feel so strongly that the service they are providing is so redundant, can you explain why so many people use them ?

FinanceForEveryone

meer53 wrote: »

If you feel so strongly that the service they are providing is so redundant, can you explain why so many people use them ?

errrr...lots of people use Mis-sold PPI agencies, debt consolidation companies...just because lots of people use them is no proof that they add any real value

Moneymash

FFE this is a hell of a lot of advertising for Amigo loans, my spider senses are twitching.

Apples2

Even the guys username could be the slogan for some kind of guarantor loans company..