Poor Credit Loan

Grantos

Hi guys,

I need some advice/help. Back in January after Christmas work was quiet and we were very low on money so I took a £3k loan out with Amigo Loans with my mother as the guarantor.

I paid the loan every month on time since at £128.33, I've also over paid a few times to bring it down but even now (thanks to the interest) the balance is still £2784.01!

I have paid in £1223.31 but the interest has swallowed it.

Now I was perfectly aware of the rates when I signed up but now business is doing really well but my credit rating is still low. I'm looking for an alternative loan to consolidate this with a better rate.

Can anyone point me in the right direction?

Thanks in advance!

Dandytf

I’ve used Avant and Likely loans past 2 years.

No the least expensive -%50ish though certainly accept low credit ratings defaults.

cjmillsnun

Could you ask your mum to take out a loan with a decent company (you could tell her how amigo are screwing you over) to pay off amigo, then pay her the monthly payments?

Gambler101

If business is doing well pay off as much extra as possible every month!!

Dobbibill

Have you done any eligibility checkers for a loan or a credit card.

https://www.moneysavingexpert.com/eligibility/loans-calculator/

https://www.moneysavingexpert.com/eligibility/credit-cards/

Also - what is on your credit reports? what gives you bad credit history? - is it recent activity or years ago?

If you are unable to get a loan with lower APR then asking your mother would seem like the best option given she is equally liable for the loan you have with Amigo anyway.

System

Your credit rating is going to be stuffed for some time. Sub prime lenders like Amigo and payday loan companies appearing on your credit record does you a lot of harm.

May I suggest in future that you work out what you need to live on per month, only pay yourself that out of the business and leave the rest there so you can continue to pay yourself when there is little work instead of doing what a lot do and blowing what they earn in good times and being shafted when the work drops off? You can then start paying yourself more once the business has built up a decent buffer in the bank.

System

Many people get other loans to repay previous loans. This really doesn't work for a lot of people.

If business is good maybe you can afford to pay an extra 250-300 a month for a few months by going without the usual. Takeaways, beers etc.

DCFC79

Its not clear if it was for personal use, I will have a guess it was, you need to look at your personal spending and cut back. If you have or know some months you should have a contingency or diversify so when work is quiet you still have some work.

SHill

Contact citizen advice bureau

Fireflyaway

I'd try to just work through it. In the past I took out a consolidation loan and I felt relieved at the time, then it dawned on me that I'd not actually improved the situation, just moved the debt to another creditor. Multiple applications and sub prime lenders on your file don't look good and I'd imagine another loan provider wouldn't have a hugely lower interest rate. Have you done a written budget? See where you can make some savings and just throw everything at the loan. After that, get an emergency fund saved so you won't have to take out a loan if something happens in future. I know my suggestion isn't a pleasant one but it will probably do the least harm to your credit file and get you out of debt quicker.