amigo loan

reavenrocket

hello mse people,
I was asked by a friend who i also employ in my business to help them out with an amigo loan this year. I agreed and in March a loan for £5,000 was paid out to myself which i then forwarded on to her.
A condition of this loan was me asking her to explain exactly why she needed it - well, everything came out, eventually.
5 payday loans, from £200-£1000, her mothers jewelry at a pawn shop for £300, money owing to her ex-fiance (£1500) and £600 on a tesco credit card
I arranged all the payday loans to be capped and the accounts suspended, the cc to be cut up and she had to talk with her ex-fiance about waiting for his money.
Forward to now - 7 months later. All payday loans paid, ex-fiance to £1000 and the tesco credit card paid off every month - she mails me the statement.
It got me thinking though about the Guarantor loan - i know she makes sure its paid, but i know her SoA, and she runs a tight ship, though thats mainly down to me pointing out what she should do each month to get her finances in order.
The £309 payment each month clears just £154 off - she effectively is working 15 hours gross or 18 hours net each month just to pay the 49.9% interest.
I'm thinking of making a loan to her each month of £700 which with her £309 will clear the outstanding balance (£3800!! after 6 months from £5000) inside of the next 4 months. I will then write an agreement to be repaid for £150-£200 per month thus saving her £150 a month in interest.
Now my problem is some people view is that im crazy (my business partner)and she will owe me close to £3000 by february, and yet others say pay it off for her (my mother of all people) - the debt is as good as mine as it is hers and i will be saving a lot in interest.
I pay her approx £1400-1500 after tax each month, with a month in hand.
I can clear the entire debt, but im thinking if there is a £3800 payment against her account, then the whole 'rebuild your credit rating' idea of using amigo is spent. £700+£309 from her each month for 4 months looks better on her credit file?
what do you guys think?
Btw, about me - bankrupt at 35, lost everything, and i mean everything - now 48, worked everyday since the bankruptcy and now earn well into the 40% bracket - it really has helped, and its the reason why I have helped this woman - watching her with tears streaming down her face as she sat at my desk 7 months ago brought it all back to where i was once at
anyway, do i pay it off or leave it for the next 18 months at 49.9%?

[Deleted User]

Pay it off. You're stuck with the debt either way if she doesn't feel like paying, so you may as well reduce the interest.

Pixie5740

If someone approached me about being a guarantor for them and I wanted to help them I would lend them the money myself. If they stiff me on the repayments I would then only lose the principal rather than the principal plus 49.9% APR.

dealer_wins

OP its your loan, and you have been stuffed like an Xmas turkey.

Pay it off, and learn from it, I feel for you mate!!

andyfromotley

Hi Reaven,

I will echo what has already been said. Pay it off as you are on the hook whichever route you take if she decides to stop paying. Dont worry about the rebuilding credit gumph from amigo.

Can i just say what a lovely thing you did, not just being a guarantor (which i have reservations about) but more importantly taking the time to help this person sort their finances and giving guidance and support. Nice one.

reavenrocket

Thankyou for the replies - I have never really thought about the guarantor loan as mine until quite recently.
I have had a chat with her today, with amigo loans and with the accountant.
What we are going to do is give an interest free company loan for £3617.45 which will clear the entire debt to amigo. She will repay £200.96 a month for 18 months freeing up £106 a month direct from her wages.

Andy, i've been there - the woman (she is 28 btw) was shaking as she started to tell me her money problems, and so scared at the situation she had put herself in. I've never seen someone shake with fear before, and it was quite upsetting. But the only difference this time round for me personally was understanding the payday loans - I'm amazed at how easy it was for her to have 6 accounts at 1500% plus and still be offered more. It was a real eye opener for me, and I am now in a position to help which i havn't been before - not just on the money side, but speaking with each of the payday lenders to freeze accounts, arrange payment terms, opening up the sheaf of letters she brought in the next day, including a recent bailiff letter for a mobile phone she took out 4 years previous but never paid. I think they found her because she had moved onto a tenancy agreement with two other girls - managed to call the bailiffs and paid the £340 there and then. The worst part was driving her to the pawnbrokers to get the jewellry back.

I think its right to clear this guarantor loan - and thanks for this website for making me understand more of what a guarantor loan is - i should of come here first I think, but hindsight etc.

thanks

[Deleted User]

You are a true legend in my opinion OP x ♡ this

reavenrocket

Thanks Pixie,

I know this now, thanks to this site, but at the time I just read the info that i was sent and it made sense to me.

I just never considered that effectively i had a loan at 50% interest if she became too ill to work or went awol because of the level of debt she was in.

Ebe_Scrooge

LOL, what kind of reputable financial institution uses a Gmail address :rotfl:


Spam reported, along with his other post.

reavenrocket

do amigo use a gmail address then ebe scrooge?

and who spammed?

reavenrocket

Does Amigo use a gmail adress then ebe scrooge?