Helped a friend....

Candyapple

How much was the loan for and what length of time?

[Deleted User]

Pixie5740 wrote: »

I know mum worries about what will happen when her and my father are no longer here but am I f**k bailing him out.

Ah yes, the original director's cut ending to 'The Prodigal Son'.

Shakin_Steve

I can't see how your friend could ever hope to get a mortgage. People hoping for a mortgage at some time in the near future need to be saving for a deposit, not taking out Amigo loans.

bearcat16

As others have said, if he misses or is late with payments, amigo will chase you, not him. The forum is awash with examples of it. Also your own credit history is on the line if you don't immediately make good on any late/missed payments by him.

Amigo loans appearing on your friends credit file will have the opposite effect of improving his score. Resorting to high-interest, sub-prime lending, such as payday loans and things like amigo are known to be regarded as evidence of poor financial management. This will damage mortgage prospects.

As zx81 has said, your best course of action (his too, but primarily yours) is to take a loan from a mainstream lender like tesco, Barclays etc, (<5% Apr) and pay the amigo loan off. Then get your friend to make payments to you instead.

I would do so as quickly as possible, because if he's struggling to afford payments it's only a matter of time before he is late or misses one, then you'll be on the hook for it.

Also, payments to you will be lower (and therefore more affordable) due to the lower interest rate from a mainstream lender.

gycraig_2

Why do people do this, you have took on all the risk of a stupid Apr loan to help out a friend who can't really afford to be paying a high interest loan.

If he has a bad enough credit rating that he has to take an amigo loan chances are he doesn't really give a !!!! about his credit rating. That's fine though because the guarantor almost always does.

How much is the loan ? Just pay it back or get a loan and pay it back and hope he pays you it's not worth all the stress

Gaz83

gycraig wrote: »

Why do people do this, you have took on all the risk of a stupid Apr loan to help out a friend who can't really afford to be paying a high interest loan.

Many people think that being a guarantor for a loan amounts to no more than giving a reference saying the person is of good character and will pay it back.

Muddybum

To answer a few questions....

5K is the sum and 60 months is the term.
My friend was genuinely desperate when he approached me and I believed I was helping him out, clearly I was wrong.

I'll look into loans and see about getting us both out of this situation, it pains me but I see no other option...

gycraig_2

Muddybum wrote: »

To answer a few questions....

5K is the sum and 60 months is the term.
My friend was genuinely desperate when he approached me and I believed I was helping him out, clearly I was wrong.

I'll look into loans and see about getting us both out of this situation, it pains me but I see no other option...

Not a maths wizard but that's 200 pound interest added a month ? A loan for yourself is definitely a better lption

foxy-stoat

Muddybum wrote: »

To answer a few questions....

5K is the sum and 60 months is the term.

Borrowing £5,000 and paying back £13660 ----crickey !

Get another loan or money transfer card NOW...clear this and still get him to make £220 odd monthly payments to you - you will clear the balance much quicker than 5 years.

Get a settlement figure in writing, get him to sign the back of the letter confirming you are lending him the money @ £220 a month for X number of months until the new lending is clear, just in case you need to go to the small claims court.

If he is in a position to get a mortgage before this is paid (unlikely) he should be in a position to pay you a lump of money as he will need thousands for a deposit....unless someone else is gifting him cash to buy a place.

I do not think this chap is YOUR friend....you are a VERY good friend to him though!

Good luck and let us know how you geet on.

Pixie5740

Muddybum wrote: »

To answer a few questions....

5K is the sum and 60 months is the term.
My friend was genuinely desperate when he approached me and I believed I was helping him out, clearly I was wrong.

I'll look into loans and see about getting us both out of this situation, it pains me but I see no other option...

This isn't much help to you now but you never know it might be handy in the future or if someone else stumbles across this thread.

Do not agree to be a guarantor for someone using Amigo loans or a lender of similar ilk. When people have to resort to these kind of lenders it is usually because their credit files are a toxic slag heap. The best way to help them is to direct them towards one of the debt charities (CAP UK, National Debtline or Step Change). Those charities can go through the debtor's range of options with them.

As it now stands should your friend continue to struggle with debt and end up with a Debt Management Plan, Debt Relief Order, IVA or bankruptcy he will drag you down with him.