another amigo

Air_wolf

Hola Amigos
I have trawled through these forums for a while now but have only recently registered for some advice.
I have financed my friend on 2 occasions and he has never let me down, so when he fell into a situation that required an amigo loan (he has poor credit from student days that has never really recovered) and he asked me to be guarantor, initially I hesitated but because he has always paid the loans before I had no reason to believe he couldn't now.
So I agreed, amigo went through the affordable check list with me and deemed I was eligible to be guarantor for my friend's £7500 loan at £296 a month for the next 5 years for a total of £17760

Fast forward things have gotten a little sticky, he has had hours at work cut which meant he was struggling and has lapsed this month's payment.
Since agreeing to become guarantor, I myself have had a change in financial circumstances and not a positive one.

What are amigo's options with regards to recovering the loan if my friend is not able to cover it and (at nearly £300 a month) neither am I?
Can I offer a smaller amount per month?
Also, what happens if I am to go bankrupt, is the loan still recoverable from me?

Thank you all for any advice.

P.S i have just done a night shift so will be going to sleep, I will reply later on tonight to any replies.

DCFC79

Why oh why do people mix money and friends as it never ends well.

Regarding who they would come after if neither can pay well no 1 I guess, same with going bankrupt only go that route if your sure.

StopIt

Amigo will be coming to you if the person defaults, then you'll be liable to repay the rest of the loan.


You can offer a repayment plan, but when you signed as a guarantor, you agreed that you were able to pay if the other person was not, in full.


So if they do come after you and you can't pay, you'll be defaulted too, and the debt will likely got to a DCA etc etc.


Yes, if you do end up unable to pay BC will clear it but that's an extreme way to clear it. Depending on your circumstances there's different ways to deal with this and if you need help, speak to the CAB, StepChange or another debt charity for assistance.


A bit late now, but honestly, never, ever be a guarantor, even with the best of intentions it's folly to do so for both of you.

Dribiddi

£10k interest over 5 years...no wonder this economy is toiling when that's where people's spare cash is going

iolanthe07

my friend's £7500 loan at £296 a month for the next 5 years for a total of £17760

This is outrageous usury. Can it really cost £10,000 to borrow £7,500 over five years? This is loan shark territory.

PeacefulWaters

iolanthe07 wrote: »

my friend's £7500 loan at £296 a month for the next 5 years for a total of £17760

This is outrageous usury. Can it really cost £10,000 to borrow £7,500 over five years? This is loan shark territory.

49.9% APR.

Around 4000% cheaper than some payday loans.

MEM62

iolanthe07 wrote: »

Can it really cost £10,000 to borrow £7,500 over five years? This is loan shark territory.

Yes it can and yes it is. But for as long as individuals are prepared to guarantee these loans Amigo will stay in business.

The business model is that Amigo are effectively lending at sub-prime interest rates while the security is based on someone with a good credit history. It's very clever, almost brilliant, and will continue for as long as guarantors are stupid enough to keep signing up.

AndyPix

The kicker is - Had you simply taken out a loan for your friend - In your own name , You would now be liable for thousands of pounds less debt ..


D'oh

MEM62

AndyPix wrote: »

The kicker is - Had you simply taken out a loan for your friend - In your own name , You would now be liable for thousands of pounds less debt ..


D'oh

And the friend would have been less likely to struggle with the repayments in the first place as they would have been significantly lower.

Amigo Loans strike me as being a loose-loose situation in most cases.

Clive_Woody

MEM62 wrote: »

And the friend would have been less likely to struggle with the repayments in the first place as they would have been significantly lower.

Amigo Loans strike me as being a loose-loose situation in most cases.

But the Amigo adverts are so uplifting and positive.....oh right

[Deleted User]

iolanthe07 wrote: »

my friend's £7500 loan at £296 a month for the next 5 years for a total of £17760

This is outrageous usury. Can it really cost £10,000 to borrow £7,500 over five years? This is loan shark territory.

If crazy enough to borrow so big from these types of lenders then yeah. High cost loan for a long time was also where they went wrong.

My recent APR was something like 1306 on £200 on STHC - more palatable way to look at it was it's actual costing of £1.60 per day. The APR doesn't really apply.

A bbc1 programme on loan sharking in the new year said how the term should never really apply to payday lenders and the like, only those that operate away from the high street.