Loans2Go offers what I have called the worst loans in Britain.
Since 2021 they have been charging 770% APR. See the representative example Loans2Go quotes on its website:
- £550 borrowed for 18 months is a monthly payment of £113
- this adds up to £2035, a bit less than four times what was borrowed.
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MUCH cheaper to get a payday loan than a Loans2Go loan
Of course Loans2Go don’t point this out on their website, but check out these numbers!
With a payday loan for £550, the maximum interest that could legally be charged is £550 – the amount borrowed. So you would only have to repay £1,100 – the £550 borrowed plus the £550 interest. And the monthly repayments for a payday loan for 12 months can’t be more than £92.
So you would pay a payday lender £92 for 12 months
but Loans2Go is charging MORE PER MONTH (£113) for MUCH LONGER (18 months).
Loans2Go also used to offer logbook loans, but this article is just about their standard personal loans. If you had a logbook loan from them, use the template on this other page.
Is this legal?
The Financial Conduct Authority (FCA) calls payday loans “High Cost Short Term Credit”. Its definition of High Cost Short Term Credit is a loan over 100% in APR and of 12 months or less.
So the Loans2go loan is outside that definition because it is 18 months long. So it isn’t caught by the price cap rule.
Unfortunately, this means its loans have crept through a loophole and are legal. I think the FCA should close this loophole.
Many people are winning affordability complaints about Loans2Go loans
I think this is the worst loan in Britain.
A loan is unaffordable for you if the monthly repayments were so high you couldn’t afford to pay them without hardship, borrowing more or getting behind with important bills. This is a standard affordability complaint, used for many other sorts of loans. If you win this you will get a refund of all the interest.
Because Loans2Go loans are so expensive they are often unaffordable. Many people are winning Financial Ombudsman (FOS) complaints about these loans – here is just one example: Miss R’s personal loan provided by Loans 2 Go.
No-one who isn’t desperate would take one of these loans out, and the ombudsman says Loans2Go should make more detailed checks on affordability when it thinks the borrower may be in difficulty.
Several people have said they were not given the full details about the loan before the money was given to them. If this happened to you, say this in your complaint as well.
First complain to Loans2Go
It doesn’t matter if you have repaid the loan or you are still paying, you can still complain.
You have to complain to Loans2Go first, you can’t go directly to the Ombudsman.
Email customerservices@loans2go.co.uk and copy it to ps@loans2go.co.uk. Put AFFORDABILITY COMPLAINT as the title.
Use this template as a basis and make any changes so it reflects your case:
I am also complaining that the interest rate was grossly excessive. It is unfair to charge someone more per month over 18 months than they would have paid to a payday lender for a loan the same size over 12 months.
[only add this next sentence if the date of your loan was after the end of July 2023] This loan does not represent fair value and it is in breach of the FCA’s Consumer Duty.
[only add this if you were not told the loan terms] The loan was not adequately described to me before I was given the money. This is an unfair way to give high cost credit.
I am asking you to refund the interest and any charges I paid, plus statutory interest, and to delete any negative information from my credit record.
[delete if you have repaid the loan] I would also like an affordable repayment plan to be put in place if I still owe a balance after this refund.
I am also making a Subject Access Request (SAR) for all the personal information you hold about me including, but not limited to, my applications, all credit and other affordability checks, a statement of account for my borrowing, and a record of all phone calls.
Let me know in the comments below if you are making a complaint about a loan that started after the end of July 2023, as there are some new regulations about those.
Is an offer from L2G a good one?
If L2G has offered to wipe a small balance or take some money off what you owe, you have to decide whether this is a good enough offer to accept.
For example, they may offer 50% of the interest off “as a goodwill gesture”. Or to reduce your balance by 50%. These are often very poor offers, you could get a lot more by going to the Ombudsman.
Sometimes Loans2Go will increase an offer if you push them. Here is what one reader said:
They replied firstly with the offer to half what was left and agree a payment plan and I refused and they immediately came back and wiped the loan clean and removed it from my credit file.
It’s up to you what you think a good offer is. But you can’t change your mind later if you accept and then think you shouldn’t have.
So ask a question in the comments below if you aren’t sure.
Take a rejection or a poor offer to the Ombudsman
You can send your complaint to FOS if Loans2Go has rejected it or has made you a poor offer. This is easy, just use this simple FOS form which asks you what they need to know to set up your case.
Send your bank statements to the Ombudsman – 3 months before and 3 months after the date of the loan. These are the best evidence that the loan was unaffordable for you.
Refunds from large loans inc car finance
Can you get an overdraft refund?
Could a Debt Relief Order help you?
Leila says
Hi I’m not sure if you received my other comments but any help will be greatly appreciated
I took a loan £650 I’m having to pay £2400 something back I cannot afford this I’m in overdraft and have several credit cards I have missed payments with. I went to the ombudsman and all I provided was my medical sick notes to show not working and that I had not been working every 3/4 months I didn’t think of sending my bank statements they closed the case and decided I can afford it
But it’s strange because I don’t even work, in a month I’m at work like 4 times and the rest im off km on probation and I know I am losing my job because I have way to much absence
I really don’t know what to do please can you advise me :(
Sara (Debt Camel) says
Talk to a debt adviser eg National Debtline on 0808 898 4000
It sounds as though you shouldn’t be making any payments to your debts, although the Loans2go may feel like a massive problem, so are the others. You need a solution that will cover them all, nit just remove interest from this one. National Debtline can talk about your options including a Debt Relief Order.