Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

    • JeremyC1971
    • By JeremyC1971 11th Oct 16, 9:49 AM
    • 1Posts
    • 0Thanks
    Amigo Loans Extortionate rates
    • #1
    • 11th Oct 16, 9:49 AM
    Amigo Loans Extortionate rates 11th Oct 16 at 9:49 AM
    I was recently asked to be a guarantor on a friend's loan for 5k. He is a very old friend, liquid, he and his wife both work, they have equity in their house etc. Unfortunately, he lost his business 3 years ago and is spending 7 years paying off the debt he'd racked up which has affected his rating.

    I agreed to be guarantor and preceded to fill out the form. However, on further investigation I realised that the loan (5k remember) which was repayable of 60 months at 197 per month, was going to add up to interest of 6857 (that's the interest only).

    I did a comparison with Nationwide and if I paid the same repayments the loan would be cleared in 27 months and the total interest would be 261.

    So in other words, Amigo loans are charging 26 times the high street rate despite having the added security of a credit worth guarantor.

    Does anybody know whether this is worth flagging with the ombudsmen? I am appalled at how unscrupulous these companies are being in taking advantage of the disadvantaged, people who are just trying to get back on track. With rates like that, it's no wonder people can never get off the bottom rung.

    Thank you for reading.
Page 2
    • MEM62
    • By MEM62 13th Oct 16, 10:19 AM
    • 1,527 Posts
    • 1,153 Thanks
    I would imagine a lot of guarantors simply refuse to honor their guarantee commitment, hence the need to charge quite a high APR to be able to turn a business profit.
    Originally posted by Gambler101
    I doubt that. The guarantor has to have good credit history. That suggests that (a) they are clued up and run their finances properly and (b) they would not risk their good standing by defaulting. The guarantor is more likely to pay than to trash their credit standing.

    In this way Amigo has established a business model that is high reward but relatively low risk.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

19Posts Today

3,863Users online

Martin's Twitter