Amigo loans

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Rutlandblue
Rutlandblue Posts: 20 Forumite
in Loans
Can you give me any advice please, my friend is guarantor for her daughter for Amigo loans (Sharks) she did not realise how much interest was on this loan, took this out years ago and let her daughter keep topping it up. She is already paying off another debt of her. But this Amigo loan is bloody ridiculous, is there any way of getting out of this spiralling debt from Amigo. Please don't comment how stupid she is. Because I did not know about this till she told me and I know how stupid she's been, being a guarantor and letting her daughter top up. She is really struggling to pay this loan off, most of what she pays is lost with the interest on it. Would really appreciate some sensible advice. Thank you.

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  • DCFC79
    DCFC79 Posts: 40,598 Forumite
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    edited 15 April 2019 at 9:28PM
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    Rutlandblue wrote: »
    Can you give me any advice please, my friend is guarantor for her daughter for Amigo loans (Sharks) she did not realise how much interest was on this loan, took this out years ago and let her daughter keep topping it up. She is already paying off another debt of her. But this Amigo loan is bloody ridiculous, is there any way of getting out of this spiralling debt from Amigo. Please don't comment how stupid she is. Because I did not know about this till she told me and I know how stupid she's been, being a guarantor and letting her daughter top up. She is really struggling to pay this loan off, most of what she pays is lost with the interest on it. Would really appreciate some sensible advice. Thank you.

    Sensible advice is what you get here.

    A loan from a lender at a cheaper rate and pay off Amigo but if she is struggling so maybe wont work.

    Its possible, depends on her credit file and salary plus other factors like how much the other loan is for.

    Cutting bck on spending would be a start, can the daughter not cut back on her spending to help her mum.

    Why did she agree to be a guarantor ?
    IF Amigo can be paid off will another guarantor loan be taken out ?

    You say she wasnt aware of the interest on the loan, she signed the agreement, surely this was on the agreement.
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    Her options are to either refinance at a cheaper rate, or more likely, cut back and overpay as fast as she can.

    She also need to stop adding to the loan, obviously.
  • MallyGirl
    MallyGirl Posts: 6,627 Senior Ambassador
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    Sadly the only option that incur less interest is to take out anew loan in her own name with a normal lender. If her credit history is good then she has a chance but they will take the current loan into account as they can't be sure she will pay the Amigo one off with the new one. This might make her struggle to meet modern affordability rules - depending on her circumstances.
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  • jonesMUFCforever
    jonesMUFCforever Posts: 28,898 Forumite
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    On a legal note (and I don't know the answer) is the original guarantee still valid if the loan has been topped up - or would the guarantor need to agree to any new lending?
  • cjv
    cjv Posts: 513 Forumite
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    If she is really struggling financially then she can approach the lender with her state of affairs and ask for help, alternatively contacting a debt charity for advice.

    She needs to be struggling though, as there is a difference in not wanting to pay high interest and not being able to.
  • mjm3346
    mjm3346 Posts: 46,898 Forumite
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    cjv wrote: »
    If she is really struggling financially then she can approach the lender with her state of affairs and ask for help, alternatively contacting a debt charity for advice.

    She needs to be struggling though, as there is a difference in not wanting to pay high interest and not being able to.

    Not sure proving she cannot pay would do any good as non-payment is what the guarantor is responsible for covering.

    (Assuming from the post the necessary approvals were obtained for the top-up "being a guarantor and letting her daughter top up")
  • cjv
    cjv Posts: 513 Forumite
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    mjm3346 wrote: »
    Not sure proving she cannot pay would do any good as non-payment is what the guarantor is responsible for covering.

    (Assuming from the post the necessary approvals were obtained for the top-up "being a guarantor and letting her daughter top up")

    Sorry, I meant if both the daughter and guarantor can not pay
  • foxy-stoat
    foxy-stoat Posts: 6,879 Forumite
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    Rutlandblue wrote: »
    she did not realise how much interest was on this loan

    Not possible as the guarantor would of seen all the paperwork at the start - maybe they didnt read the agreement.

    Cheaper rate finance is the answer - maybe money transfer credit cards and balance transfer cards.

    How much is the settlement figure?
  • Paul_DNAP
    Paul_DNAP Posts: 751 Forumite
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    jonesMUFCforever wrote: »
    On a legal note (and I don't know the answer) is the original guarantee still valid if the loan has been topped up - or would the guarantor need to agree to any new lending?


    What Amigo call a "top up" is a whole new loan application that is used in part to settle the old loan and the other part is new cash lent out. So a whole new application and therefore a new guarantee is made each time.
    (Although I could be wrong, I often am.)
  • System
    System Posts: 178,094 Community Admin
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    i'd like to know why she is paying it off and not the daughter. If the daughter is like any of the sons/daughters we see on here from similar situations they'll be continuing to lead the life of Riley quite capable of paying the loan but not doing because it would mean they'd have to miss going out once a week or not having to have another new pair of shoes they don't need.

    If the daughter is capable of paying the loan then you as her mother's friend need to speak with the daughter and tear a right strip off her, pointing out how selfish she is and how much she is harming her mother and how much her mother is having to struggle because of her own selfishness and self centred attitude.
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