Guarantor Loan via false pretences

Merrlyn

Hi All, looking for some help and advice with a stupid situation I've got myself into.

Around 2 years ago I was asked to go guarantor on a loan for a very old friend who, at that time I had the utmost trust for. This person had explained that they'd just paid off one loan and wished to take another until a work bonus came through in about a month or so. They needed to borrow £3k and the bonus would pay off £2k the following month in a lump sum, leaving an easy £1k to be paid off within around 6 to 9 months. The terms of the loan were 5 years, payments £110p/m but all that was fairly irrelevant as with the bonus and the easy payments all would be sorted in well under a year. This person is an old friend of over 30 years and so I took them at their word.

Funnily enough the work bonus didn't appear, but in the first 18 months there was only 1 missed payment which I needed to pick up. However, at 2 years in, I now seem to be making more payments than not and upon further digging, the prior loan (apparently paid off) seems to still be in full flow with another mutual friend being guarantor on that. Needless to say, as guarantors, both of us - guarantor me, and guarantor new person - appear to be making more payments than the actual loan holder who has now decided to 'go dark and take time out to get their head together' :huh:

Apart from feeling rather stupid at getting involved in the situation and in particular, not checking things out more thoroughly at the start, without things becoming too ugly what I'd like to do is to consolidate the two guarantor loans into a single loan, which is solely in the name of the person who owes the money, and releases both myself and other guarantor from our duties as overseers of the two individual guarantor loans which seem only to be paid by us and not by the 'loanee', but obviously this person has trouble getting credit and so will struggle to get a loan in their own name.

I'm looking for advice as to companies that this person could approach who will consolidate their debts into one single payment, not involve a guarantor, and at least give them some form of reasonable interest rate (I know the last one may be a bit of a stretch.)

To be honest, any advice (other than should've been more careful in the first place - I most certainly realise that now) would be appreciated as to how to handle the situation and remove both guarantors from the loan process.

The really frustrating thing is that if I'd wanted to take out a loan then I'd have been able to get a far more favourable interest rate than the one I now seem to be paying on behalf of my 'hiding from life' apparent 30 years plus friend!

all suggestions gratefully welcomed:doh::doh::doh:

Bermonia

The simple truth is that you cannot... if your friend has had to resort to guarantor loans it is because his credit file is so abysmal even the short term high cost loan market won’t touch him... certainly not to consolidate debts.

Best you can do is try and persuade them to face the issue and to try and deal with it, Debt free board gives lots of advice on how to pay off loans quicker.

[Deleted User]

Your ambitions are madness, unfortunately.

You have a borrower who has a track record of not repaying. His debt is split between two companies, each with someone who is willing to make repayments when the borrower doesn't want to.

No company will take on the whole debt, while simultaneously losing their back of guarantors to pick up the slack.

You may as well get your own loan, clear the debts and ask him to repay you. He probably won't, but you'll end up repaying this one anyway, just at a higher rate

pjcox2005

I'm guessing the friend may not have any assets but if they do can you encourage them to sell to recoup some.


I think your options are:


Tough love - you and your friend help them try to deal with their financial situation with selling assets, working out a budget, approaching step change. They probably won't like you for it but will benefit immensley if you succeed.


Take the hit - you and your friend (second gaurantoor) take out loans in your name hopefully at a much lower interest. Pay off the guarantoor loans and see if your friend will pay anything. Likely hood is they won't so you'll just have to see it as a financial hit to you but at least you won't exasperate it with 30/40/50% interest! You may keep the friendship from their perspective but whether you would still want to keep it is another matter.


Sounds like they're struggling though if hiding away so they may also need help from a GP as well as a debt counsellor. These are unlikely to be the only two debts!

-taff

Take out a lower interest plan yourself and pay your guarantor loan off. You will not be able to take a loan out in someone else's name.
You will probably never see this money back either. You could take them to a small claims court but if they haven't got any money you can't take any off them but it might make you feel better.

Sncjw

Also just to say a consolidation loan will asses him on double his debt as there’s no garuntee he would use he money to pay the current loans off.

Think about it. If he needed loans that have Garuntors meaning others would pay for it then surely that means he can’t get a normal loan