Amigo Loan Gone Bad

Tixy

With these type of threads taking the relative/friend to court is often recommended.
But unless there is specific evidence to the contrary I suspect that a court would simply rule that by agreeing to be a guarantor they are agreeing that they are prepared to pay the loan repayments if necessary and that therefore the relative does not legally owe the guarantor any money.

I think the only exceptions to this would be if there was a prior written agreement between the 2 parties (separate to the commercial loan agreement) that the borrower would repay the guarantor if the guarantor ends up making any payments, or if the borrower is prepared to sign such an agreement afterwards or puts in to writing that they agree they owe the guarantor £x.

Tixy

Poppy24 wrote: »

Thanks everyone. The amount is around £7000 and now that my friend is trying to chase the money it transpires that her relative has already fleeced closer family members for quite a large amount. If only she'd spoken to them beforehand....

If they know of any other family members/friends she may try to tap in the same way then perhaps it would be worth warning them.

27col

Tixy wrote: »

With these type of threads taking the relative/friend to court is often recommended.
But unless there is specific evidence to the contrary I suspect that a court would simply rule that by agreeing to be a guarantor they are agreeing that they are prepared to pay the loan repayments if necessary and that therefore the relative does not legally owe the guarantor any money.

I think the only exceptions to this would be if there was a prior written agreement between the 2 parties (separate to the commercial loan agreement) that the borrower would repay the guarantor if the guarantor ends up making any payments, or if the borrower is prepared to sign such an agreement afterwards or puts in to writing that they agree they owe the guarantor £x.

How can the borrower possibly owe the guarantor any money. Surely the borrower borrowed the money from the lender Amigo, not from the guarantor. or am I misreading the Amigo format. It might be interesting if someone could tell us exactly what the legal status of the borrower and the guarantor were in respect of who owes who,what.

jonesMUFCforever

If the borrower fails to make a repayment the money is taken out of the guarantor's account and any charges are passed to the loan increasing the total debt.
The max loan they do is £5000 but it won't take long for a few missed payments and charges and interest for the total debt to increase to £7k as in this case.
I just wish these loan companies were forced to send the guarantee to a solicitor of their choice for the implications of signing to be made clear to them.


I have posted this previously - AMIGO is the devil of loan companies much worse IMO than payday loans.

Tixy

27col wrote: »

How can the borrower possibly owe the guarantor any money. Surely the borrower borrowed the money from the lender Amigo, not from the guarantor. or am I misreading the Amigo format.

Agreed. But people are suggesting that as the guarantor has repaid the loan then could then take the borrower to court. I disagree.

jonesMUFCforever wrote: »

I have posted this previously - AMIGO is the devil of loan companies much worse IMO than payday loans.

The one positive for amigo is that they do insist on paying the loan to the guarantor who then passes it to the borrower. Not all guaranteed lenders work like that.
At least amigo are working harder to ensure that the guarantor does know the loan exists and the paperwork is much less likely to have been forged by the borrower. Though that is not to say I think that an amigo loan is ever a good idea.

The loan paperwork does clearly explain how the guarantee works, and under what circumstance they would be required to pay. The main issue is that often the guarantors either don't read the paperwork they are signing or, more likely, are too trusting of the friend/relative's ability and trustworthiness to make repayments.

Poppy24

Waaaaaaaay too trusting in this case. Whatever the law says is completely different to the laws of human nature.

dealer_wins

Poppy24 wrote: »

Hi All, I know a lady who was duped into thinking she could trust a relative and agreed to guarantee a loan via Amigo Loans. This works by the money actually being paid to the guarantor who then pays it to the person who needs the loan. Said relative now seems to have no intention of paying her back and is becoming increasingly difficult to contact. The lady in question has since taken out a personal bank loan (at a much better interest rate) to pay off Amigo and rid herself of their extortionate loan rate with but is still left with a big debt. Can she do anything to get her money back?
Cheers.

The answer is no.

She agreed to guarantee the loan should the borrower fail to pay it back.

The borrower has now failed to pay it back, so her guarantee is being called upon.

An expensive lesson has been learned, never guarantee a loan for someone else, and dont assume friends and family are immune from stitching you up!!