Have you heard that a guarantor loan is a good way to improve a bad credit score?
That’s bad advice. There are big problems with guarantor loans and there are much better ways to improve a bad credit rating!
If you already have a guarantor loan, or you are the guarantor for someone else’s loan, see the bottom of this article where I look at what your options are.
Many people want to improve their credit scores
Here is a newspaper article with a case study headed LOAN HELPED ME REBUILD AFTER BREAK-UP. That suggests that a guarantor loan is a good way to repair a bad credit score.
The case study in that article sounds like a common situation. Amy was managing her debts then things went wrong and she got missed payments then defaults on her credit file. But her life moved on and, with a new partner and a new job, Amy wants to repay the debts and improve her credit record.
A consolidation loan can seem the obvious answer – cheaper than credit card interest, one simple payment to make. But with defaulted debts, Amy can’t get a consolidation loan at a good rate because of her bad credit record.
The suggested way forward was to take out a guarantor loan with Amigo, use it to settle the debts with defaults and repay it. The loan would be guaranteed by Amy’s new partner so her bad credit record wouldn’t matter.
So why isn’t this a good idea? Let’s look at what is wrong with guarantor loans and at the better alternative Amy could have gone for.
Amigo has over 85% of the guarantor lending in Britain. But everything here also applies to other guarantor loans, eg from George Banco, Bamboo, Buddy Loans etc.
Amigo loans are incredibly expensive!
Say Amy borrowed £3,000 over three years from Amigo to pay off those defaults.
Using Amigo’s APR of 50%, her repayments would be £146 a month and she would pay £2,269 in interest.
Compare that to a reasonable rate for the same unsecured loan. At that time you could get a loan for under 8% for £3,000 over 3 years as the best rate on offer. You can get much better rates for larger loans.
But those top rates are hard to get unless your credit record is brilliant. So consider an OK rate, not one of the best ones, say 14%. There the monthly repayment would be £102 and the total interest paid would be £691. A big saving!
Not only will a better rate loan mean Amy pays less interest, but the lower monthly repayments mean that she will be able to cope with them more easily even if her other expenses go up faster than her income does.
What if you are currently paying even higher interest than 50%
This isn’t the case for Amy – interest will be frozen on her defaulted debts. But if you have payday loans paying 1000% interest, isn’t it a good idea to pay them off with a guarantor loan at “only” 50%?
The answer is that it still isn’t a good idea. The way out of a payday loan trap is to ask for a payment arrangement on the loans and make affordability complaints – that may mean that the interest is removed from your current balance.
Amy can’t get a good rate loan… but her partner can
Amy’s bad credit record means she won’t be able to get even an OK rate offer for a loan. But her partner should be able to.
He may even be able to get a top rate loan or have savings himself.
If he pays off her debts, she can then repay him at a much more reasonable rate of interest. Everyone wins.
Cheaper and safer ways to improve Amy’s credit score
The newspaper article is saying how great it will be for Amy to be able to improve her credit score. If her partner takes the loan, or lends her the money she won’t benefit from this.
It is true that repaying any credit on time helps your credit score, so repaying a guarantor loan would help.
But here are three alternatives, all better than a guarantor loan, for helping Amy get over the damage caused by the defaults.
1. Do nothing (!)
Repaying defaulted debts doesn’t in itself improve your credit score.
You may think that can’t be right… but it is. The credit score calculations don’t change if a debt with a default on it is being paid slowly, fast or when it is repaid in full. See Repaying a default & your credit score for details.
What does help most is time.
After a couple of years the bad effect of your credit score drops a bit, then a bit more after four years, then six years after the default date, the debt will drop off a credit record completely. It will disappear whether it has been repaid in full or it is still being settled.
So Amy’s score will be good in a few years whatever she does now.
She is making payments to the defaulted debts so they are being dealt with and she isn’t at all likely to get a CCJ. And she isn’t paying any interest on the these defaulted debts. So the idea of borrowing at 50% interest to repay them is not sensible.
2. Speed up the improvement with a bad credit card
Amy can speed up improving her credit score by getting small amounts of credit and repaying that on time.
One option is for Amy to get a “bad credit” card and use this for something small and repay it in full every month. This way she doesn’t pay any interest at all and she will get some positive marks on her credit record, so her score will improve.
At first these positive marks won’t have much effect because the bad marks from the defaults will be a lot bigger. (That is exactly the same for repaying the Amigo loan.) But after a year or so they will be helping a bit and the effects of the defaults may get a bit less.
Then when the defaults drop off, Amy won’t have an “empty” credit record – which isn’t good – but a clean one with the good marks from the credit card giving her an excellent credit score.
3. Improve credit score by small regular saving
An even better choice that became available in 2018 is to use LOQBOX to make small regular monthly savings. This is set up like a loan, so if Amy saves for a year, it looks on her credit score as though she has repaid a loan for year.
By doing this she gets all the credit building benefits of a guarantor loan without the risk. She can stop saving at any time during the year and get her money back. At the end of the year, she as a small pot of money saved as well as some positive marks on her credit record. She can then get another LOQBOX for the next year if she wants to carry on saving.
Can Amy really make regular savings?
Suppose her partner does take out that loan at 14%. The repayments will be £44 a month less than the repayments on the Amigo loan. So Amy should be able to commit to saving £20 a month with LOQBOX and still be better off than if she had gone for the expensive Amigo loan.
What if she doesn’t want to borrow from her partner?
If you are looking at a guarantor loan, you may think it sounds better than borrowing the money from the person who would be your guarantor:
- you don’t think your mum could afford a loan on her pension, but she could be a guarantor because she has a house;
- your friend is planning to get a mortgage and wouldn’t want to take out a loan;
- you haven’t been living with your partner for long.
But those are all also excellent reasons why that person should NOT act as a guarantor for your loan.
Never ask someone to guarantee a loan if they can’t easily afford the repayments – it isn’t fair on them.
Guarantor loans are expensive – you may find yourself struggling to make the repayments after a while. One of the reasons Amy defaulted originally was because she was ill and lost her job – that could happen again.
Lenders like Amigo are very quick to chase your guarantor instead. They won’t give you time to get back on your feet, they will very soon ask your guarantor for money if you don’t make the full repayments.
If things go badly wrong for your finances – you could lose your job, have your hours cut, have a baby, become ill etc – there are options such as Debt Management Plans that can help you. But if you put a guarantor loan in a DMP, the lender will just go after your guarantor.
So what should you do?
Ask yourself if your possible guarantor is well off with spare money every month?
- Yes – then talk to them about how they could help you repay your debts and you could then repay them.
This will save you a LOT of money. - No – then you shouldn’t ask them to be a guarantor. It’s too dangerous for them.
Don’t take the risk that your credit rating problem could become someone else’s debt nightmare, it’s not fair. Instead take some debt advice.
If you already have a loan from Amigo
You may already know this was a huge mistake! So what can you do about it?
If your guarantor couldn’t manage to repay your loan if you can’t (and by “repay” I mean from their income, not by selling their house!), they can complain to Amigo and ask to be removed as a guarantor. That would be a great weight off your mind. It would turn this guarantor loan into a “normal” loan and you could pay it off as part of a debt management plan or any other debt option.
You too can make an affordability complaint to Amigo if the monthly payments on your loan are so high that you are having to borrow more or get behind with your bills every month. There is a template letter to help you do this in Ask for a refund from a guarantor loan. If you win this complaint, the interest will be removed so you only have to repay what you borrowed, and this can then be at an affordable rate.
How much will my credit score change if…
Could a Debt Relief order help you?
How to tell which debts are a priority
Steve says
Hi
Can you possible put in a claim as unaffordable for amigo loans.
I had defaults and pay day loans etc when I took out this, I have not missed a payment, but move the date around so I don’t fail, then borrow pay day loans to help
Any thoughts
Sara (Debt Camel) says
Hi Steve, you can put in a claim for any type of loan, but it tends to be easier to show that payday loans are unaffordable because (a) they tend to be used repeatedly and (b) the repayments required are very high. If you feel that the guarantor could not have afforded the repayments either, then it may be a good idea to put in a joint complaint.
Two practical notes. First I think you should talk to StepChange about your situation. You have to stop taking more payday loans. Stepchange will understand that the guarantor loan has to be treated as a priority debt. Second, I hope if you get payday loan refunds you will be able to use these to settle the guarantor loan.
Big Dave says
What I usually say is ‘if a guarantor or payday loan seems to be the answer, have another look at the question’
Matt P says
Hi Sara,
Would the FOS support my case: I had an Amigo Loan but then entered into a DMP with Stepchange a few months later. The DMP paid some money towards the loan repayments and I managed to scrape together the rest ( not wanting amigo to go after my mother as guarantor). 6 months into this and I was able to top up the loan, despite being on, and them knowing I was on, a DMP. Would the FOS support my case that this ‘top up’ loan shouldn’t have been given and was unaffordable?
Thanks! Matt
Sara (Debt Camel) says
That sounds well worth a try! Come back here if Amigo rejects your complaint.
Matt P says
Hi Sara,
So, Amigo rejected my complaint stating that expenditure reviews suggested that the loan repayments were affordable, that the DMP was irrelevant in their decision making process and that as I hadn’t complained about affordability and that I had maintained my payments throughout the duration of my loan with them there was no cause for them to uphold my complaint. I’m a bit disappointed because I genuinely thought that the fact I was on a DMP would be enough.
Do you think the FOS would uphold my complaint? I don’t want to waste their time if they’re only going to find in amigos favour suggesting that they had indeed and everything they could….?
Sara (Debt Camel) says
The DMP supports the argument that you couldn’t afford the repayments. The question is, could Amigo have told this at the start, in which case they shey should not have lent to you?
What did your credit file look like when you applied? Defaults, recent missed payments? What would it have shown for the amount you were repaying to your debts each month? These are the sorts of things you need to make the case that Amigo should never have loaned to you.
Andy says
Just put a complaint in to amigo. Will keep people updated how it goes as we don’t have much info about them and outcomes.
Danni says
Just wondering how your complaint is going. I have a loan with Amigo and then a year or so later got one with Buddy both using the same guarantor so would be keen to see if I can find a way to get the interest froze etc without affecting my guarantor so I can get rid of these pay almost £600 per month to them both.
Sara (Debt Camel) says
Could your guarantor afford to pay £600 a month? If not, they can put in an affordabilty complaint. See https://debtcamel.co.uk/payday-loan-refunds/ which looks at affordability complaints for payday loans but the principle is the same for guarantor loans.
If your guarantor can win an affordability complaint, they will probably be removed as a guarantor, so you could enter a DMP without it affecting them.
Kat says
I have put a claim in with Amigo as I felt they loaned to me irresponsibly. I am unsure how the FO see this but I was the one who took the loan, my guarantor may have backed the payments up but the affordability assessment on myself was not done correctly. I had many pay day loans at the time of application which didn’t seem an issue to them. Also this company try and get you to top up your loan constantly, then the way they do this is shocking, the amount of interest is absurd and I understand their target customer is people with credit problems but surely as a company it is not fair to prey on people who already have issues obviously making them worse. I never missed a payment and did pay my loan off successfully but I got a bank loan to do this when my credit improved as the APR was crippling me.
If I am honest I am not confident as I know they are quite strict with their criteria, however I still feel looking at my credit file, they never should have loaned me a penny. Will keep you updated!
Matt P says
Hi Kat,
I too have just submitted a complaint the Financial Ombudsman Service after Amigo Loans declines to accept my grounds for complaint citing that they had carried out the necessary affordability checks and despite having other payday loans and being on a debt management plan they still deemed me able to afford the repayments. They claim that being on a debt management plan does not exclude my access to a loan and therefore was not part of the consideration however I believe it should be. I’d love to hear how you get on…
Kat says
I have not had a reply from Amigo yet but have been on the FO website to look up results of affordability complaints against Amigo and it seems the FO do not uphold many complaints against them. Most Complaints go in Amigo’s favour it would seem. We will just have to wait and see!
Sara (Debt Camel) says
Sometimes the decisions can be misleading because they only publish the cases that go to the Ombudsman level. Any cases that are won at the adjudicator level are not visible. So if Amigo reject your complaint and you think it’s a good one, take it to the FO.
Rukz says
Hi
My husband got into a gambling spiral a year ago. He borrowed money of people behind my back and took several payday loans to gamble and try and recover the lost money stupidly.
Things got worse and when he had to pay poeple back he begged my brother in law to be the garuntor for amigo and took out £6000.
My husband continued his gambling spree and has now has a reality check. He is trying to make things better but as he has lostt his job he is struggling. He has fallen behind with amigo and the garuntor now cannot afford to make payments as he himself is a single father of 2 small kids and claiming tax credits himself to help as he is struggling.
What can i do in this situation? I have spoken to amigo over the phone and they have refused to freeze any interest as the garuntor should be able to pay as it was affordable for him when the loan was taken out.
Thanks for the advice in advance
Sara (Debt Camel) says
It sounds as though the loan wasn’t affordable for the guarantor… I suggest he needs to go to Citizens Advice and they will help him. If your husband could go at the same time this would probably help.
Rukz says
Hi
Since 10th feb the loan had a outstanding payment of £292, which I managed to scrape together and pay by the 10th of march. But 10th of march as i cleaered the previous payment, the new payment was also due so techincally the account never became zero. However this means the account was only late with payments since 10th feb. Thats one month and 3-4 days. They had sent a default notice out which if i didnt pay the £292 by 14th March would expire. This is why i got the money together and made the payment on thr 10th but amigo refused to cancel the default or take into consderation that I had made a payment.
The way they saw it, the account on the 10th feb was behind on x292£ and i paid just the one installment.
They threatened to take both parties to court and have said if the default expires and no payment has reached the account they will pass onto the prilitigation team and they will collect the whole amount.
Today the default has expired now and there is nothing i can do as we cannot afford to make that payment.
My question is can they really default the account so early on, its only been on arrears since 10th feb and really had I paid on the 9th march rather then 10th it would have been £.0.00 due.
And my second question is if they are collecting the full amount would they be collected the amount till date or would it be the amount the loan was agreed to pay back over 3 years which was about £10k?
Sara (Debt Camel) says
I don’t think the default is really your top priority in this situation. I repeat my suggestion that your husband and his brother should both go to Citizens Advice and ask for their help with an affordability claim.
Matt S says
I have an Amigo Loan that was taken out in December 2013, £5000 over 60 months at £197.62 paying back a total of £11857.20. Crazy I know but at the time I was desperate. Despite being in financial difficulty for the past few years and having gambling issues I’ve always made sure this is paid as I don’t want my guarantor to have to pay anything towards it. Have 22 months left and starting to see light at the end of the tunnel (most of the interest has been paid back now and they’ve informed me that the final 17 payments will all go towards reducing the capital).
Just wanted to follow on from what someone mentioned earlier with regards to top ups. I’ve no intention of topping up but am constantly getting texts / emails offering me a top up as a good customer. Just logged on to my account to see what my balance was and out of interest clicked on top up to see the costs etc. Basically for me to keep my payments the same (£197.62 a month) I’d get a new £5000 loan, they would pay off the balance of £4150 on the old loan and I’d get £850 into my bank account. As the loan would then be restarting its 60 month term I’d have an extra 38 payments to make compared to where I am now. Or in other words I’d receive £850 from them and pay an additional £7500. Couldn’t quite believe it. It would basically work out that if I topped up today I’d have received a total of £5850 from them and would end up paying back £19366 over 8 1/4 years.
I know people can be desperate, I’ve been there myself but please stay away from companies like Amigo and certainly avoid top ups.
Mrsob says
Hi has anyone gone up against Amigo loans and won
Sara (Debt Camel) says
I had a client at CAB in December where I got a different guarantor loan provider to remove the guarantor from the loan after a complaint. This was settled in a month, no need to go to the Financial Ombudsman.
If you think your loan was unaffordable or Amigo should not have given it to you, or if you are a guarantor and don’t think you were properly told about the what you were signing up to or that Amigo didn’t conduct a proper affordability check on you, going to your local Citizens Advice could be a good way to proceed.
Sara (Debt Camel) says
For anyone reading these old comments – in 2019 the ombudsman started upholding a LOT more Amigo complaints!
CA says
Is the general opinion that if a loan was totally unaffordable to the borrower (i.e. me) because I had numerous payday loans for which the majority I have had my complaints upheld by the FOS but my guarantor would be able to make the repayments, that a complaint against Amigo being successful is unlikely?
Thanks
Sara (Debt Camel) says
No. Amigo should have checked the loan was affordable for you and also for the guarantor. Were you asked why you wanted the loan?
Mrsob says
Hi Sara
In my case I was asked why I wanted the loan. I took my first in 2012 and subsequent tip up (x4) as I went on mat leave twice and felt I needed it for bills and to cover payments
Thanks
OO
Steve says
Hi
I have received £4000. I have a £2500 loan with Amigo, £1500 left on a Likely Loans loan, a £2000 overdraft and 750 x 2 on credit cards. (Limit 800 on each). My dilemma is not knowing how to spend the £4000 in order to boost my credit score. Which is the most damaging and needs paying first?
Steve
Sara (Debt Camel) says
I am sorry but I have only just seen this old comment.
The logical answer is to pay off the debt with the highest interest as that will leave you in a better position to repay the rest. But I would always suggest that guarantor loans and logbook loans should be the top priority to clear as they can cause so much grief if you get into financial problems. It will be great to know that your guarantor is no longer at risk, so that would be the one I myself would choose to repay first.
After that if you want to boost your credit score, getting the credit card loans down to zero will help the most… but the Likely Loan will probably be at a much higher rate of interest.
Matt S says
Hi Sara,
I sent Amigo an email asking whether they cross checked the information I gave them over the phone against credit reports / bank statements etc. and they have responded with the below :
“When you completed your budget plan with us, we did pull up information from your credit file and would have took in to account any money you were paying out to other creditors.
We also compare the information you have given us against the Government guidelines, if the information we are given is realistic and within the Government guidelines, we have no reason to question this further or request proof. As the information you provided was not outside of the Government guidelines, we did not require you to send us proof of your income or outgoings or question the disposable income that you had as we trusted that you had given honest and accurate information.”
Do you think its worth taking this further and making an actual complaint? I know I wouldn’t have lied about my income but cant remember what information I gave about outgoings!! My credit report would have shown notifications of being in debt management but not sure they’d take this into account.
Sara (Debt Camel) says
Up to you, sorry but you have gone through a few payday loan complaints so you must have a reasonable feel by now for whether the Amigo loan was unaffordable. If it was, then why not complain? You know the drill, it’s not going to take you long.
Also I have absolutely no idea what “government guidelines” they are referring to!
Matt S says
Well this is bizarre, I went back to the above email asking for a copy of or link to the government guidelines they mentioned and have received a reply saying ‘Thanks you for your message, I’m not sure what you mean regarding government guidelines?’.
So it appears that they don’t have a clue what they are talking about.
Sara (Debt Camel) says
Just send them a formal complaint. You can include their odd responses if it goes to the Ombudsman.
Kerry says
Hi,
I know it’s not a payday loan but wondering if anyone can help me. I took out a guarantor loan with Amigo at the height of my loan struggle last year. The loan was for 24 months of which I have paid 17 consecutive months since my loan started. They have sent me an email saying I have 8 repayments remaining (along with a £6500 top up offer which I thankfully won’t be accepting) but that makes 25 payments. I emailed them and got a very basic email back stating “At the start of the loan there was a few late payments. This has affected when the loan is due to finish” By late payments they were no later than the 4th of the month instead of the 1st. Surely this does not justify an extra months repayments being added on? Also has anyone put in an unaffordable lending complaint against Amigo and do you know if they contact the guarantor should such a complaint go in…..
PS. Thanks for a great website from which I’ve had some great results so far :)
Sara (Debt Camel) says
No your guarantor won’t be contacted.
I think you should ask for a statement of your account and find out what has happened – they may have added late payment charges or something? You need to know the facts before you can decide whether to challenge them,
Paul says
I took out a £4,000 loan with Amigo followed by a top up of a further £6,000 only 4 WEEKS after my initial loan. This was because i moved home due to homophobic abuse, so we had absolutely nothing! No carpets, no sofa, no washing machine, tumble drier, cooker, fridge freezer etc! We had absolutely nothing, so were desperate for all that we could get.
Myself and my husband both have the same name (Crazy i know!.. but true!).. amigo asked for bank a bank statement from me, so i sent them it.. They then assumed that this were my husbands bank statement also.. so they made the decision based on ONE BANK STATEMENT! (that of the borrowers, myself in this case)
Sara (Debt Camel) says
so you are the borrower and your husband is the guarantor? And you are renting? Do you have other debts as well as this loan?
Paul says
Sara,
Yes, that would be correct. I am indeed the borrower with my husband as the guarantor.
I am renting yes and yes, i have plenty of defaults on my credit record (around 17 to be exact)
There are 2 parts to this (with the second part below this comment) – it wouldn’t let me send it all at once..
Per my comments, they didn’t even ask my husband (the guarantor) for his bank statements, so i would assume they got confused with us having the same name.. This then means that they have soley based there decision on my only income (Which was benefits at the time) and i have proof of all bank statements that i sent.
They did not ask for my husbands (the guarantor), so they have then assumed that he can afford it without carrying out reasonable checks on him?
The only thing they knew he received was his disability benefit of £220 per month (his disability goes into my bank account), but this doesn’t even cover the interest never mind the contractual payments of £395
Sara (Debt Camel) says
Well your husband could make an affordability complaint as it seems his income was clearly too low. If he is removed as a guarantor, you just have a normal unsecured loan.
If you have a lot of other debt, then it’s probably best to look at some form of insolvency – probably bankruptcy if you owe over 20k and are renting. Your husband’s disability benefits would not be taken into account if you go bankrupt. I suggest you talk through your situation with National Debtline and do say that you think your husband is trying to get removed as a guarantor as the loan was unaffordable.
Paul says
My total debts are £17,837 (this includes Amigo at a staggering £11,583 (with interest rising at £263 per month))
Should Amigo never have happened, i could have taken out a payment plan to cover the small and manageable amount of £6,000 given that most of the debts are that old, there about to drop off my credit report.
Sara (Debt Camel) says
ok, these old debts – how long since you last made any payment to them? Even if they drop off your credit record they still exist so the question is when are they likely to be statute barred? See https://debtcamel.co.uk/no-calls-or-letters-about-debt/. Debt collectors very often take you to court for a CCJ in the last few moneths even weeks sometimes) before a debt becaomes statuet barred.
If you made an affordability complaint to Amigo, it is possible you could get the interest deleted, but you would always have to repay what you borrowed. If your old debts are very soon (next month or two?) going to be statute barred AND you could manage to repay what you borrowed to Amigo if the interest wasn’t there, then you may want to try an affordability complaint to Amigo.
But if you are getting letters about the old debts or it’s going to be a while before they are stature barred then insolvency is probably a better option for you – gets rid of the lot. As you owe under 20k, it would be worth talking to National Debtline https://www.nationaldebtline.org/ about whether you meet the criteria for a Debt Relief Order (see https://debtcamel.co.uk/debt-options/dro/ for info on this) otherwise bankruptcy.
(It’s best to avoid an IVA unless you have assets to protect as you will have to make monthly payments for 5 years – an IVA is not better for your credit record or getting a mortgage in future than bankruptcy and don’t believe any firm trying to sell you an IVA who says it is.)
Whatever you do, an affordabilty complaint to Amigo for your partner will hopefully dispose of that as a problem. But if you don’t win the complaint OR he has other debts as well, then a DRO for him is also going to be a good option if his only income is benefits.
Craig says
Hi
i am on a debt management with step change, whilst on this i took out a further advance loan with amigo, can i make a claim for irrisponsible lending whilst on a debt management? and would this affect my guarantor?
please Help
Thanks
Craig
Sara (Debt Camel) says
Yes you can make a claim for unaffordable lending. But you will have to carry on paying it whilst the complaint is being considered, or they will go after your guarantor.
If you win a complaint in this situation, it is typical that any interest is removed from your balance and you can then set up an arrangement to pay the rest.
(Is it possible your guarantor could also make an unaffordable lending complaint? Amigo should have checked you can both afford the repayments. If a guarantor wins an affordability complaint, they will be removed as guarantor then you would be left with a normal unsecured loan which you could get included into your DMP.)
Zakiya Hussein says
I have 2 garuntor loans, one with amigo and one with bamboo loans, can I make a complaint with these companies as I am struggling.
Sara (Debt Camel) says
yes… here is how to complain: https://debtcamel.co.uk/how-to-complain-guarantor-loan/
but if you stop paying them whilst your complaint is going through, they will go after your guarantor. Does your guarantor also have a case to say they could not afford the loan repayments? if they do, then the guarantor too could complain. Here is a different page on complaints by a guarantor: https://debtcamel.co.uk/amigo-complaints-by-guarantor/
vickie9 says
Thanks Sara for info about Amigo. The loan is paid off now but if I put an affordability complaint in would they just look at my affordability to pay it back because if they looked at the guarantor she would of had no problem with it. Sorry if this isn’t the right place to ask this.
Sara (Debt Camel) says
Amigo have to check your affordability and the guarantor’s separately – they can’t just say your loan was fine because your guarantor had a lot of money.
Vickie9 says
Thanks Sara. I’ll put something together and send it off then. Had they looked at my credit file at the time i was bogged down with Payday lenders and had very little money left to pay anything. In fact without payday loans their monthly payment wouldn’t of happened. They offered me a top up quite a few times which i declined but i guess its worth a shot.
Vickie9 says
Hi Sara, I have checked the one page application that I have and the original loan was taken with FLM which then became Amigo, it was actually taken over 6 years ago. Is this the same as Payday lenders with only a handful accepting claims made over the 6 year mark? I hadn’t realised that you could put a complaint into FLM/Amigo until you said about it but at the time of taking that out I was in the midst of Payday loan hell and thought this would help, it didn’t, just put me under more pressure but when you are in the midst of these things you just don’t realise just how bad it is. Is it worth me putting a complaint into them?
Sara (Debt Camel) says
It is possible you could win this if the loan itself was still going during the 6 year period. But you won’t be able to show what problems there were on your credit record that long ago as they will all have gone by now. This 1 loan guarantor case may be pretty hard to win, so if you go for it, keep your expectations low.
Vickie9 says
Yep thought as much, I might try and see what happens though, if nothing comes out of it no worries only two emails lost Thanks for replying, much appreciated
Richard Johnson says
Hello, I have a big amigo loan issue.
My girlfriend has an amigo loan of £7250 and her ex is the guarantor. When she took out the loan she had and still has a very low income an a son so gets child support. There was no proof of income supplied by either of them when the agreement was taken out. She had severe post natal depression an led to further issues with depression that she still has. The loan is 49.9% and the payments are £285.93 per month for 60 months yet the total repayment on the loan is £17193. 60. I strongly think she has a case for not being able to afford the loan when it was taken out. She tries her best to pay it each month but often can’t. She’s asked them to reduce the amount she has to pay but they point blank refused and offered no help whatsoever saying she must make full payment or they will take it further to court. Any advice would be appreciated
Sara (Debt Camel) says
That sounds very difficult for her to afford. What are her ex’s circumstances like? If the loan would be unaffordable for him too, then he and she could both make unaffordable lending complaints?
Richard Johnson says
Hi, thanks for the reply Sara.
His circumstances are better than hers but still not great. Also looking through the contract there seems to be some very iffy terms. The 49.9% Is done per year making it so high. What paths would be best to take to make an unaffordable lending claim?
Sara (Debt Camel) says
EDIT – Richard used the new template letter here https://debtcamel.co.uk/how-to-complain-guarantor-loan/ to make a complaint to Amigo.
Paul says
I’d just like to give everyone an update on my complaint.
After reading this article back in December, I decided to put for forward an affordability complaint with Amigo and the complaint lasted 8 weeks and had just ended 2 days ago.
Amigo voluntarily decided to remove my guarantor from my loan as and in their words “failed to carry out reasonable affordability checks on the guarantor”
They still claim however, that they did not lend irresponsibily and so I have a lodged a further complaint with the Financial Ombudsman.
Whilst I appreciate that my guarantor is no longer liable for any debt, I still should never have received this loan as they did not follow the correct procedure. Should they have followed the correct procedure, my guarantor will have failed this check and I will not have got the loan due to this.
I was also in default with amigo only 3 days prior to taking a top up loan, further showing I couldn’t afford it, but they still gave me a top up loan at double the monthly cost.
The financial ombudsman has been excellent, so now Im just waiting on them.
I’ll update further.
Sara (Debt Camel) says
Getting your guarantor removed is excellent news. Fingers crossed you win the case at the Ombudsman and get the interest removed so you only have to repay what you borrowed and at an affordable monthly payment.
Tracey says
How do u make a unaffordable lending complaint please
Sara (Debt Camel) says
EDITED to add links to the new pages I have set up for complaints about guarantor loans.
For a guarantor loan, the lender should have made adequate checks on both the borrower AND the guarantor. So both the borrower and the guarantor can make affordability complaints.
A complaint by the borrower should ask for the interest to be removed from the outstanding balance and for affordable monthly payments to be agreed (or a refund of the loan has been repaid). The lender can’t say the loan is affordable just because the guarantor can afford it, if the borrower can’t. Template letter for a complaint by the borrower here: https://debtcamel.co.uk/how-to-complain-guarantor-loan/.
A complaint by the guarantor should ask to be removed from the loan as a guarantor. The lender can’t say the loan is affordable for the guarantor just because they own a house – “affordable” means that the guarantor can make the repayments on time without hardship or borrowing more money – not having to sell the house or get a secured loan on it! Template letter for complaints by a guarantor here: https://debtcamel.co.uk/amigo-complaints-by-guarantor/
Sue says
Hi my son (stupidly) became a guarantor for a friend who has defaulted on his payments, we did supply to Amigo the borrowers place of work details, as an AOE was mentioned and that’s what they said would be needed. Both my son & borrower now have a CCJ against them, they are now in the process of putting a charging order on my sons flat, and have said its not easy going for an AOE on the borrower. Could Amigo go for a “force of sale” on the property?
My son did contact Amigo in April 2015 and explain he was under financial strain, out of work and had to move back home as could not afford to live at his place, he was also under the doctor for depression/anxiety. They didn’t offer much help or solution, and even though the borrower was paying on and off they then went ahead with the CCJ. Would there be a case to file a complaint with the FO?
Sara (Debt Camel) says
When was the loan taken out? Is your son currently working? Living in this flat? Is there much equity in it?
Sue says
Hi Sara
The loan was taken out in December 2013, yes he is now working, though in 2015 he was on job seekers, yes he is living back in his flat; (we have helped him). I would say there is some equity but don’t know how much its a shared ownership of 40%.
Thanks
Sue
Sara (Debt Camel) says
If he is living in the flat and making the court set payments to the CCJ (these can be changed if they were set at a level he can no longer afford – talk to National Debtline on 0808 808 4000 about this) an order for sale is incredibly unlikely.
I don’t know if you are likely to get anywhere with a complaint to the FO about Amigo’s behaviour in 2015 – it is likely to depend on the details of the case.
Sue says
After the CCJ was set against the borrower & my son; it was the borrower that was making payments, after several months he stopped. My son couldn’t afford to make any re-payments so Amigo took it back to court and has applied for a charging order.
I have asked several times of Amigo why they didn’t apply for an AOE on the borrower at the same time when they took it back to court, as we had given them the borrowers place of work details. I cannot get a straight answer from them why this was not done. Is this something they could do?
Thanks
Sue
Sara (Debt Camel) says
I am afraid it is up to Amigo how they want to enforce CCJs. You could argue to the FOS that Amigo was not treating your son fairly because they were aware of his financial and mental health problems but they chose not to take the alternative course of action of an AEO. I haven’t seen a complaint like this so I can’t predict how it might go.
OObees says
Hi. I have been in arrears with Amigo to the tune of £1000 since Jan 2018. I had a payment arrangement in place to which I clearly said I couldn’t afford in countless emails, anyway to get them off my back I paid £690 on Jan. I couldn’t afford that in Feb so I paid £300. They confirmed I broke my agreement so I begged over email to pay £400 a month to help cover arrears (original payments to them is £300)
As I’m also 7 months pregnant this put me in a stressful situation and I couldn’t pay march payment.
I didn’t contact them. So Last week just paid the full arrears of £1000 and asked if I could continue Payment of £300 as normal
They confirmed that they have now taken this to court and I have to respond to them (the courts)
As I am 7 month pregnant this is causing me alot of stress. I know I brook our agreement twice but the arrears is now clear.
And as I know I can make Payments I don’t want my gurantor involved
Can you help me with what to do now pls
Thanks
Oobees
Sara (Debt Camel) says
Can you confirm what stage this is at:
– have you received a Letter Before Action/Claim from them? this is a letter with several other documents attached including a reply form. See https://debtcamel.co.uk/letter-before-claim-ccj/.
– have you received a Claim Form from the court, see https://debtcamel.co.uk/court-claim-form/.
Is there a reason they are chasing you, it’s unusual, they normally simply go after your guarantor?
Do you think the loan they gave your was “affordable” – this means that you could afford to make the monthly repayment without having to borrow more money or get into debt elsewhere?
oobees says
Hi Sara.
I have received a claim form from the court which has given me 14 days to respond. I informed Amigo that my Guarantor is not in a position to make payments. I didn’t think it the loan affordable, I took them to the ombsudman and lost.
I have paid off the arrears, however, they have said that they are still taking this to court. Is it because I had made arrangements with them and only paid £300 in Feb and had a late payment in April?
Its really stressing me out?
Can you advise me please? Everywhere I go they tell me that Amigo have the upper hand?
I still want to make the monthly payment ….i just dont know where to turn
Sara (Debt Camel) says
“Is it because I had made arrangements with them and only paid £300 in Feb and had a late payment in April?” well probably. Lenders understandably prefer people to stick to an arrangement. Making an arrangement you can’t afford because you are under pressure may have seemed like a good idea at the time but they tend to unravel when you can’t keep up with the payments,
Now a court case has been started, you have to choose whether to defend it or complete the court forms to offer a monthly payment that you can afford. I suggest you call National Debtline on 0808 808 4000 and discuss your options and what an affordable payment would be.
Most people with guarantor loans also have other problem debt. Although this Amigo case is clearly your most urgent problem, National Debtline will also be able to help with your options for your other debts.
oobees says
The only reason I made the arrangements for Jan, Feb and March was due to the arrears. Now I have cleared the arrears I want to continue the original monthly payment which was £300.
But they have taken me to court so do I just complete the forms then?
My other debts are in a DMP helped by National Debt help line. so all debts are under control in that sense
Sara (Debt Camel) says
yes, provided that the £300 is compatible with making your current DMP payment. It really is worth talking to National Debtline about how to complete the forms.
Rachel says
I took an amigo loan out in 2017 for £5000 topped it up twice and ended up in £9756 of debt. Luckily my mother in law paid the full balance off but can i still do an affordability complaint? as I do not think it was done correctly. I never made a payment on time through the whole time I had the loan so it made me think all my details were checked correctly and also my guarantor checks too.
Sara (Debt Camel) says
Yes you can claim for a loan that has been repaid. If they allowed you to top up the loan after you had missed or made late payments then you should definitely mention that in your complaint.
Ashley says
Hello,
I’m in a really sticky situation financially with over 55k in debt owed to 15+ companies.
I borrowed 5K from Amigo in July using my mum as a guarantor, and within 2 months it had gone to 7.5K and by Nov it was 10k.
I don’t think the loan was affordable due to a) my existing debt at the time of my first loan and b) My Mums’ salary wasn’t high enough to cover payments if I couldn’t. I contacted Amigo in Dec 17 to let them know I was experiencing financial Issues and they refused a payment plan. I entered a DMP in Feb and Amigo are receiving the biggest chunk but they still want more.
The FO have contacted them asking to freeze interest and withhold from court action whilst they finish investigating my complaint but again they’ve refused.
2 questions.
1. Amigo will not accept my stepchange payment so if I do go to court will that work out better for me as the court will decide what I can afford?
2. Are there any success stories with Amigo loans and unaffordable lending where the FO have agreed in favour of the customer?
I find it really hard to believe a company can treat people the way Amigo do and get away with it. There should be consumer laws to protect people and ensure companies like Amigo HAVE to accept payment plans instead of adding ten times more stress to everything.
Sara (Debt Camel) says
Has Amigo actually started court action? Against you or your mum?
You have put in a complaint to Amigo? When?
Do you realise your mum can also make an affordability complaint to Amigo? I have covered this here: https://debtcamel.co.uk/amigo-complaints-by-guarantor/.
Concerned Sister says
I cannot believe how Amigo can get away with this. My sister was a guarantor, so far she has paid £3000 back and still has £7000. She was unfit to be a guarantor
My sister suffers from depression and is on anti depressants she was hood winked into being a guarantor by a person at her work that was more senior than her and who could see she was vulnerable.
My sister has to work double shifts and weekends to pay back this loan as the person only made a few payments.
My sister has previous poor credit rating.
My sister did not earn enough to pay back the loan (hence the double shifts and weekends) which has affected her health – they scare her so much she will lose her house. Her partner is furious as it is his house too.
They did not accurately assess her.
This is destroying, I cannot believe they are allowed to operate.
Sara (Debt Camel) says
Could you read https://debtcamel.co.uk/amigo-complaints-by-guarantor/ because it sounds as though she has grounds for a complaint? perhaps you could help her with it?
Concerned Sister says
yes, thank you, i have lodged a complaint and I am waiting to hear from them. I have told them they cannot contact her because of her depression and she gave permission to deal with me. I will let you know how we get on.
KAW says
Agreed to stand as guarantor for my sister for third top up in December 2017 for £10000 (instalments of £487.89). This should have rung alarm bells. I was reluctant due to my own levels of debt at the time (credit cards up to their limit, personal loan although I’ve always managed to maintain payments) however I agreed.
I want to have my name removed as guarantor due to irresponsible lending. If Amigo had run a full credit check, they would have seen that I had significant levels of unsecured debt and shouldn’t have accepted me as a guarantor. They only asked if I could afford the repayments which I foolishly answered yes to.
If I write asking to be removed, will they assume that I can’t make the repayments either and take me to court. I’m worried about the security of my house and the affect that this will have on my marriage. The only way that I will be able to manage this is to get a second job or try to borrow elsewhere which goes against the principle of being a guarantor.
Sara (Debt Camel) says
This article looks at a guarantor asking to be removed https://debtcamel.co.uk/amigo-complaints-by-guarantor/.
Is your sister still making payments? Have you talked to her about her making an affordability complaint too? It is often easier to get these agreed where there have been top up loans? See https://debtcamel.co.uk/how-to-complain-guarantor-loan/ for how she can complain.
KAW says
She is making the full payments, not always on time though. She has been short the last couple of months so has paid what she can but has always paid the remainder within a week of the due date. She is being forced to prioritise this payment over others, including her rent so that it doesn’t impact me. They sent out a default notice this month even though she’d paid 85% of the instalment the day after it was due.
I will ask her to make an affordability complaint also. Hopefully this will get us somewhere. The pressure that I feel under is immense.
Sara (Debt Camel) says
I am very sorry to hear that. Not paying her rent is a disaster for her – had she talked to a debt adviser, does she have any other debts that she is still making payments to?
KAW says
She’s difficult to engage in conversation about it although I know she’s spoken to StepChange. Not sure what the outcome of that meeting was though.
She’s been a victim of domestic violence and is also in the process of being evicted so she’s not having a good time of it at the moment. Issue is that there is no way I step in and offer that level of support financially without leaving my family short. Other creditors have accepted reduced payments but Amigo refuse to do that as they have me as the backup! She’s working all the hours under the sun to keep her head above water and resents having to make this a priority.
Despite the fact that she’s made the full payment this month (balance paid yesterday), I’ve had another text from them this morning telling me that I need to take over the loan. I’m going to report them for harassment if this continues.
Sara (Debt Camel) says
“Other creditors have accepted reduced payments ” sorry but if she is about to be evicted, she should be paying other creditors only £1 a month or even nothing.
If she complains to Amigo, she should consider sending them evidence of domestic violence if this is recent.
Kerri Wiseman says
Thank you for all your advice. I have now drafted my complaint to Amigo and intend to send it through to them shortly. I will let you know the outcome.
Anastasia says
Hi. I’m a guarantor of the amigo loan to my ex and he been paying through the year just the summ which they apply for him for 36 month of his loan only he had changing the payment days but I found out that he will going to Thailand for 3 month or more I pretty sure he will refuse to pay after he just left the country, any chances they will remove me as guarantor and will left only his name on this credit? Many thanks
Sara (Debt Camel) says
They won’t remove you because he has left the country and stopped paying, they will say you have to pay instead.
Were you still together when you became the guarantor for this loan?
Can you afford the repayments? If you can’t, then read https://debtcamel.co.uk/amigo-complaints-by-guarantor/ and see if you can complain – if you win, you could get you removed as the guarantor.
Anastasia says
We was split up almost straight away. So he still in a country and paying, he is only moving in few month. It’s still no any chance remove myself as a guarantor?
Also if I will open the case later if he not going to pay, I understand I still need make a payment while I’m opening the case?
Many thanks
Sara (Debt Camel) says
The only chance to remove yourself as a guarantor is either to make a complaint that repaying the loan is aunaffordable or that the implications of being a guarantor were not properly explained to you.
If you think you can do this, it would be better done now, before you start having to pay it!
Anastasia says
The other question if I will repay for his loan, can I go against to him to the court that he wasn’t pay and I must to pay for him if any day he is decided living back to the UK? Because I don’t want make bad my credit history with the years I’m living here. Also I don’t want with this payment make his credit history score up.
Sara (Debt Camel) says
Yes you could sue him, but unless he has assets or a good income it is probably pointless an dit would cost you money. If you pay the guarantor loan, it will not help his credit record.
Claire says
Hi Sara,
I had an Amigo loan which I took out in December 2011, I didn’t miss any payments and the account was fully repaid in January 2014. The account shows on my credit file under closed accounts as settled. I’m hoping to apply for a mortgage soon and wondered if having had a guarentor loan in the past whether this would affect my application? I’m not sure if they are seen in the same light as a payday loan.
Sara (Debt Camel) says
No, this won’t be a problem. payday loans have a special “flag” – to the mortgage lender this loan will look like any other loans.
Nicky says
Has any one had any success in claiming against amigo loans and recieved a refund of all charges and fees?
Sara (Debt Camel) says
Hi Nicky, yes some successes- there is now a separate page for these complaints with a template letter: https://debtcamel.co.uk/how-to-complain-guarantor-loan/
sarah Harrison says
hi i took out an amigo loan in October 2017 due after having to reduce my hours because we adopted and returned on reduced hours after adoption leave. In March this year I was put on the sick due to compassion fatigue and severe depression. My partner became a carer for our adopted daughter in April which also meant he was also unable to work. I was diagnosed with a rare brain condition May 2018 and i have had to give work up as off September 2018 and im on the sick until February 2019. I do think I will be able to to return to work. Myself and my partner was put on universal credit June 2018 and lost almost 300 a month. Now i have no wages either which means the payment of £395 at the end of October is going to be a struggle. my partner is a guarantor for myself. Im not sure what we are going to do. We plan to visit citizens advice today, but just wondering what advice you could give thanks Sarah
Sara (Debt Camel) says
I am sorry to hear of your health problems which must have made life so difficult for you after adopting.
I guess you and your partner have other debts as well? Are you renting or buying?
sarah Harrison says
hi we are currently private rental yeah we do i had a hire purchase car which I have handed back. However they finance company have managed to add extra costs. I had payed half the car off and because of the extra charges it now means that I have not and liable for the remaining debt once the car is sold. So we are trying to look into this. My partner doesn’t really have any other debt as he wasn’t working so I was the one taking out any loans. thanks
sarah Harrison says
hi could my partner apply to be removed as a garuntor?
Sarah D says
Hi Sara,
I have rolled an Amigo loan on several occassions and now at my maximum of 10,000. My mental health at the time of applying meant i was unable to make financial decisions and i therefore didnt disclose all of my outgoings. (where they knew i was in receipt of PIP). My credit file would have shown missed / late payments and debts not paid aswell as previous bankruptcy. I am currently on month2 of a reduced payment plan due to l9osing my job.
My guarantor is my mother in law who at the time was able to afford should i default but since my father in law died last year, this is no longer the case for her and we are in the process of requesting her to be removed as guarantor.
I have sent them an email requesting my loans using your template. Please can you advise if i have a case and my next steps:
Many thanks in advance Sara.
Sara (Debt Camel) says
You definitely have a case, if not for the first loan for all the rollovers/ top-ups.
If they knew you were getting PIP for mental health problems because of the PIP, then they should have been extra careful to check your application was accurate and not just take your word for it.
Sorry to hear about your MiL. Can I ask how old she and your FiL were?
Sarah D says
Many thanks for your prompt response.
My Father in law was 79 when he died so 77 when i took out the initial loan and my mother in law is now 68 so 66 when i took it out.
Their response to mines is:
Hi Sarah,
My name is Daniel an Account Manager at Amigo Loans, I have just tried to call you and discuss this. I want to explain a few of the points you have raised and then am more than happy to raise a complaint investigation for you if you are not happy.
We never charge extra interest regardless of how your loan is managed throughout the term. For example you are currently on a reduced payment plan but this is not going to incur any extra interest.
Each time you top up your loan we ensure yourself and your Guarantor complete a new income and expenditure form for us to ensure it is affordable for you and even recently when your income reduced we assessed this and offered you a lowered payment. We will not be refunding any interest as we are a responsible lender. Please give me a good time to call and go over this if you wish. If you still want an investigation carried our please reply to this email and a complaint can be raised.
Sara (Debt Camel) says
You don’t have to call them if you don’t want to talk on the phone, just reply saying you don’t think they properly assessed what you can afford and you want to continue with your affordablity complaint.
I have written a more recent article on these, see https://debtcamel.co.uk/how-to-complain-guarantor-loan/. If you haven’t seen that, read it now, as there may be some points in there that you want to ask Amigo for, such as a copy of all your personal information.
For your MiLs complaint – the question is whether they assessed her income properly. They shouldn’t have looked at her household income. As her husband was 77, they should have considered whether her situation was likely to get worse during the term of your loan.
Sarah D says
Sara,
Amigo have logged my complaint and advised that i should hear from them in the next 8 weeks. I just want to thank you again for your help so far in this matter and i will kepp you updated on the process.
Regards
Sarah D
James says
Hi,
So I got an amigo loans in July 2018 for £4000, been paying it off until December when i needed a top up and topped up to £5000 which got me 1300 back from them. Paying 213 per month has become to much for me as my circumstances have changed now and I am now earning substantially less and my guarantor will not be able to afford it. I don’t think they ever would but still got approved. I want to get them to freeze interest and let me not pay for a few months while i sort out a new job and get things together. Right now I may be thinking of going bankrupt but I cant leave this loan with such high interest on my guarantor as its not fair and they have good credit. Do you think they would freeze interest and give me time to figure things out and what would you reccomend I did about my guarantor. My payment is due on 23rd of this month and neither of us will be able to afford it.
Thanks,
James
Sara (Debt Camel) says
“Do you think they would freeze interest and give me time to figure things out” No they won’t. Sorry, they will go after your guarantor straight away, that’s their business model, being reasonable for a few months doesn’t feature in it :(
So what can you do… Two things
First you can put in a complaint that the loan and top up were unaffordable. This is often easier to win for the top-up (Amigo knew what your situation was in July, how come it had got worse so you needed another loan by December, they should have looked in more detail about whether this was affordable) but complain about both. Ask for the interest to be removed AND for a more affordable repayment arrangement to be set up. Full details with a template letter here https://debtcamel.co.uk/how-to-complain-guarantor-loan/.
Second you can encourage your guarantor (who is it?) to also put in an affordability complaint. Amigo should have checked that they can afford to repay the loan from their income. And they should have done another check in December that they could afford the repayments on the larger loan. If they can win a complaint, they can be removed as a guarantor and it will not affect their credit rating, which would leave you free to offer Amigo an amount you can afford or indeed to go bankrupt if that is the best option for you. See https://debtcamel.co.uk/amigo-complaints-by-guarantor/ which has a different template letter for a guarantor to use.
James Poland says
Thanks for your fast response, I am going to proceed with my complaint and have my guarantor do the exact same. Should this be done by email or in writing? And what about for my next payment due next week. Will I just have to figure out how to pay this?
Thanks
James
Sara (Debt Camel) says
Emails are best for complaints – instant, free and you have a record of what you sent if it needs to go to the ombudsman – which most of these cases will.
How well do you get on with the guarantor – could they help you with making the payment?
What other debts do you have – if these are “non priority debts” (see https://debtcamel.co.uk/start/priority-debts/) then you should probably not pay them at all.
This is a really hard decision to make – it might help to go through your whole situation with a debt adviser – you could call National Debtline on 0808 808 4000.
James says
Okay thanks i will email them and have my guarantor email them also. Should we both be doing this at the same time or would you recommend guarantor sort it out first? We get along well but they won’t be able to pay this either. It will just be best if I have to deal with it alone. I have 5 Credit cards, 1 defaulted, 2 standing okay just about and 2 in arrears but on short term plans for now. A credit union loan and another payday loan which is now with a debt collection agency on a payment plan. Thanks for the debt line number also
Sara (Debt Camel) says
I suggest you should both complain now. These can take many months to get settled, you can’t wait and hope the guarantor’s is sorted quickly as it probably won’t be,
Have you put in an affordability complaint to the payday loan?
James says
Do you know how long it takes before they usually reject it? I have both complaints sent and they said they will respond within 8 weeks. They are fast to text, call and email looking a payment but when you want to get something they sure take their time.
Sara (Debt Camel) says
I wouldn’t expect to get a response for several weeks. And it may be the end of the 8 weeks allowed.
James says
No I haven’t put in an affordability complaint to the payday loan as it is now with another debt collection agency called ARC. Is this something I should do?
Sara (Debt Camel) says
Definitely, if you think the loan was unaffordable. The complaint goes to the original lender, see https://debtcamel.co.uk/payday-loan-refunds/. Also any other payday lenders you used in the past?
James says
And what exactly does that do? I think I only paid it twice and then knew i wouldn’t be able to keep up the payments with them. Pounds to pocket was this one and amigo I think are the only 2 I’ve ever used.
Emily says
Hello
I was struggling with the money so I stupidly decided to get a amigo loan (because my credit history was bad ) in August 2018.
My boyfriend is my guarantor but he has a loan already with his bank for 10000£.
In December we top up Amigo loan so together we are paying about £1000 monthly for loans and credit cards. I can’t afford to pay Amigo loan any more. I don’t think so they did any properly credit check on both of us because we should get anything. Can we make a complaint? I just mainly would to take out my boyfriend name from being a guarantor and get less interes? Thank you.
Sara (Debt Camel) says
These decisions seem so sensible at the time but so stupid later :( You need to make separate complaints to Amigo.
You are complaining that:
– the original loan was unaffordable and Amigo should have been able to tell that from your application and credit record;
– the top up loan was even less affordable – Amigo should have seen how much worse your finances had got;
– ask for interest to be removed from what you are repaying and for Amigo to agree to an affordable repayment arrangement without involving your guarantor.
See https://debtcamel.co.uk/how-to-complain-guarantor-loan/ which has a template letter and looks at how to go to the Ombudsman.
Your partner is complaining that:
– he should not have been approved as a guarantor for the original loan because he could not afford the repayments
– that if you were unable to pay the loan, you would be struggling to pay you half of the bills (or whatever you actually pay) and Amigo did not take this into account when assessing if he could afford to repay the debt
– that his situation got worse by the time of the top up but Amigo didn’t take account of this
– he is asking to be removed as guarantor.
You should expect both complaints to go to the Ombudsman, don’t be downhearted when Amigo reject them, just send FOS the complaint immediately. Either complaint will get you what you want, so pursue both to give you twice the chance of winning!
Todd says
Hey Sarah, i have listened to the recording of the initial call it was under 4 minutes and just involved Amigo asking me if I completed the budget form, and asking to i understand the role of a guarantor and do I believe the borrower will pay. I was not asked to confirm the expenditure figures and none of the items listed on the link you attached in your message they asked. The only thing they asked at the end was have you got any questions with all questions i said Yes with no hesitation so it gives references to your point of answering without thinking as parts were not understood.
I want to get a doctors letter this week and it takes 10 working days to arrive, however the adjudicator says they need new evidence soon. I’m worried they will try and close the case soon. Also I got a letter from a caseworker at a homeless charity I registered with. Once again I would like your input. Thanks
Sara (Debt Camel) says
Ok, so you gave a set of expenditure figures that they didn’t query – so you need to think if all those figures were reasonable. If some of the amounts were obviously low or missing, these should have been queried. Examples which often crop up include:
– where you have a car and have given amounts for petrol and insurance, but not included road tax or servicing/repair costs
– where you have some disability benefits but there don’t seem to be any extra costs associated with your disability
– figures for food, toiletries, clothes that are implausibly low.
If you go to your local Citizens Advice they can help you look at the list and point out other amounts which are missing or too low.
Just keep your adjudicator informed. Send the letter you have, and say when you should be getting a letter from your doctor.
James says
Hi Sarah,
I had an amigo loan (they were called something else) for which I defaulted in 2011, the last payment was made in 2011. However, Amigo loans have not put a default date on my file, therefore it is still showing as “6 months in arrears” after more than 7 years and stays on my file. I have no idea what action they have taken against my guarantor at the time, whether they have taken him to court or now and we are no longer in contact.
Could you please advise what my options are here?
– Are Amigo loans obliged by law to put the default date as its true date? Should I contact them at all?
– What if they have taken a CCJ against my guarantor? What if they haven’t?
Many many thanks
James
Sara (Debt Camel) says
Yes they should add a default date back in 2011/2012. Which as it is over 6 years ago will immediately drop off your credit record.
Your options are to ask them to do this or to live with the marker.
The downside about contacting them is if they decide to try to pursue you to repay the debt. This may not be a problem at all if they got it paid by the guarantor. And won’t be a problem anyway if the debt is “statute barred”. Do you remember if they ever sent you a Default Notice for the debt?
James says
No I have not received any default notice myself as I have been living in France since 2011. I moved out of the address, hence my non payment.
Sara (Debt Camel) says
Then it’s a bit hard for you to tell if the debt is now statute barred. Which complicates deciding whether to ask them to add a default date. You could talk to National Debtline about this from abroad, see https://www.nationaldebtline.org/EW/information/abroad/Pages/living-outside-the-uk.aspx.
Is the credit rating causing you any problem at the moment if you are in France? because the longer you leave it, the more likely the debt is to be statute barred.
James says
Good afternoon James,
I have sent your Data Subject Access Request for yourself in the post today.
All calls and documents have been included on the CD. Due to data protection this CD has been password encrypted. I have sent this message to your primary email address and primary mobile number with the password to unlock the CD.
This is the email I have received after my initial email I sent from the template letter on this page. What would my next steps be?
Thanks
James says
Sorry Sara, but what should I do next? They didn’t respond about me asking for interest to be frozen or anything. They just sent that email from above and I don’t know what I should do next.
Many thanks,
James
Sara (Debt Camel) says
Is this a complaint by you? Or by your guarantor?
James says
This is a complaint by me. I did yhe template and emailed it to them and that was there response
Sara (Debt Camel) says
Have they rejected your complaint? If not, you need to wait until they do and then send the complaint to the Financial Ombudsman.
In the meanwhile, you can be looking at all the stuff they have sent. You need to listen to the call recording if you spoke to them on the phone. And look at the budget they drew up. You are looking for missing items or ones where the expenses is too low. And check it against the copy of your credit report they sent. So if your credit report shows a mbile phone contract, do you have that as an expense in your budget. etc etc
They will not freeze interest while the complaint is going through. And if you don’t pay, they will go after your mum :(
Can you put future questions about your complaint on this page https://debtcamel.co.uk/how-to-complain-guarantor-loan/ please.
And ones about your mum’s complaint on this page https://debtcamel.co.uk/amigo-complaints-by-guarantor/.
Sorry, but it gets confusing otehrwise. Especially as there is another James commenting on this article.
Tristan says
Hi.
I have a friend who I have a feeling this article may be of some use.
She owes a guarantor loan which has defaulted. Her guarantor was her father. She is being helped by Stepchange and had an initial financial assessment to arrange an informal agreement with all her creditors. Her circumstances changed sometime after whereby she had to reduce payments to all her creditors. After a new Financial Assessment all the creditors agreed except the loan company. They told her they wouldn’t accept the new amount and her father would be liable. Her father is not in financial position to repay. They had to rearrange the assessment, increasing the amount offered to the loan company, slightly less than the first initial assessment but still unaffordable due to her circumstances, as the loan company kept saying that the amount offered doesn’t cross the threshold of what they would accept, but didn’t tell her what the threshold was. She is currently in an unaffordable informal agreement.
Would this fall under the same remit as this article, in which case I will get her to kick this off.
Thank you very much in advance.
Tristan
Sara (Debt Camel) says
There are two possibilities here and if possible she should try both of them as she can’t tell which is more likely to work and they both take many months, so start them both off at the same time rather than make a guess and just try one.
If she thinks the loan was unaffordable from the start and the guarantor lender should have known this if it has checked her situation properly, she should make an affordabilty complaint. If this is upheld, interest would be removed so she only has to repay what she borrowed. See https://debtcamel.co.uk/how-to-complain-guarantor-loan/ for what to do.
If she thinks the lender should have realised that the loan repayments are unaffordable for her father, she should encourage him to make an affordability complaint. If this is upheld, he would be removed as a guarantor and the loan turns into any other unsecured loan which can be repaid through StepChange in a DMP. See https://debtcamel.co.uk/amigo-complaints-by-guarantor/ which has a different letter for guarantors.
Both complaints are likely to be rejected by the lender. Send them straight to the Financial Ombudsman if this happens – don’t be put off by the lender saying you have no case!
Tristan says
Thank you very very much. Will kick this off and let you know!
Sara (Debt Camel) says
Can you post further comments or questions on either the complaints by borrower or complaints by guarantor page please.
Richard Cockburn says
Hi what if you could afford the loan at the time as a guarantor, but can’t afford to pay now if the borrower can’t afford to make the repayment.
Sara (Debt Camel) says
That is going to be a difficult complaint for you.
Two possibilities
1) should the lender have realised the loan wasn’t affordable for the borrower? If the borrower is only getting by by borrowing more, then they may have a good complaint against the lender.
2) was it predictable that you might have problems? For example was your income likely to diminish or your expenses likely to increase eg if you had a health condition that would probably get worse? Or was your situation mixed up with the borrower, so if they were in difficulty is it likely that you might also be in difficulty – eg you are guaranteeing your partner, if they can’t pay the Amigo loan, they probably can’t pay their share of the rent etc.
Here the lender should have considered if the loan would be affordable for you not just for the month or two after you signed, but throughout the whole term of the loan.
Sara (Debt Camel) says
If neither of those will work for you, you need to look at your whole debt situation – is this your only problem debt?
Izzy says
Hi Sarah,
I took a loan from FlM/Amigo loan a total of three and my friend is the guarantor. This has been paid only had one late payment (last payment wasast February 2019).
When i took out this loan, i was on several payday loans and jaggled things around to keep me afloat with my bills.
Do you think i got a chance of claiming back against Amigo loans for irresponsible lending.
Thanks,
Izzy
Sara (Debt Camel) says
“A total of three” does this mean that you had a loan and this was topped up/refinanced twice?
Lee says
God, every time i see that amigo loan advert on the tv i shudder. Look at the happy people getting thier loan, i just wish more people would look at the crazy apr rate that is in small font at the bottom of the ad. I know some people feel they have no choice but im sure there is always a better way to get yourself out of a hole.
Johnny says
Hi I had a loan over 6yrs ago and it finished 2 yrs ago, could i make a complaint?
Sara (Debt Camel) says
Yes definitely worth complaining. As the loan has only recently been settled, there should not be a problem with Amigo not having all the details.
There is a template letter on this page: https://debtcamel.co.uk/how-to-complain-guarantor-loan/. I will this thread to that page in a day or two as it is the best place for comments about complaints.
Send the complaint in now and also set about trying to get your bank statements going back as far as possible. Ideally to three months before the loan was given.
Ace says
I took a loan from Amigo in Aug 2016 to clear other debts but in Mar 2017 i received a text saying i could top up which i did, then in July 2017 i received another text for a top up and i went of it again. Finally in Nov 2017 for the third time in the same year i was given another top up which reached up to 10k. Now i am at a stage where i hardly have funds to buy food. I complained to Amigo but after 8 weeks i had to follow up and was then sent an email stating they are very busy are are still investigating. I have forwarded the same on to FOS. I hope i can get rid of this curse. I have already paid more than £10k in interest but still the balance is the same.
jade says
hoping somebody can help I have recently just had a decision from amigo I had 3 loans first loan of 2k not upheld, but loan 2 of 3500 upheld top up loan and loan 3 which I’m still paying of 4750 upheld. also a top up loan. how does it work with the 3rd loan that im still paying I’ve been paying it for 12 months at 187 a month is the interest removed from this loan and whatever I’ve paid refunded im confused! they said I also receive 8%???? I paid 12 months of the second loan also of £156 a month can anybody work out what they think ill receive thank you!!!
Sara (Debt Camel) says
hi Jade,
so you had three loans, 200,3500 and 4750? And you made 12 * £156 payments to the second loan? And 12 * 187 payments to the third loan?
do you know how much you received in cash for the 2nd and 3rd top up loans? Also do you know how many payments you made to the first loan?
Jacs says
Hi Sara,
Amigo Loans have put themselves up for sale – and you got a mention on the BBC news article! :)
Jacqueline
Sara (Debt Camel) says
yes :) here is the article: https://www.bbc.co.uk/news/business-51266079
Sarah says
Iv had an offer from Amigo but unsure if it works out or not. It’s a significant amount so really need some help if possible.
5 loans in total. What info is needed to help me work it out.
Many thanks for any advice in adva
Sara (Debt Camel) says
Good that you have an offer – was this only some of your loans?
For each loan you need to know: the amount borrowed, the amount paid in cash to you if the loan was a top up, the number of monthly payments made (eg 7 lots of £186) and any other settlement amount you paid to the loan.
Also did your guarantor make any of the payments? And which are Amigo offering to refund?
Sarah says
Many thanks for your prompt response
Yes, after my case was with FOS they have upheld all 5 loans.
Loan
1 – £3k – Paid £1,112.70
2 – top up £4k – paidout £1,484.41 – Paid £975.80
3 – top up £5,250 – paidout £1,551.25 – Paid £1,536.84
4 – top up £6500 – paidout £1,577.38 – Paid £1,013.32
5 – top up £10k – paidout £3,771.63 – Paid £4,347.75
They have offered £11,205.80 refund including 8% interest.
Is this correct?
Sara (Debt Camel) says
So the last loan wasn’t repaid?
Sara (Debt Camel) says
Sorry, I don’t have any time free this week to look at this (lots happening with Wonga!). Amigo’s 8% calcs are always odd, but on a quick look that looks ok to accept to me. I can check the numbers next week if you want.
Sarah Docherty says
No that’s correct Sara.
Dave S says
Hi Sara, please can you advise. I have contacted Amigo with regards to an affordibilty complaint on a now paid off loan. I have since have numerous correspondences where i have provided my name, address, email address (both from when i took the loan out), d.o.b., guarantors name and also proof of the direct debits taken from my Natwest account. The only thing i cant locate is the loan agreement details. Amigo are saying that they cant find my details and could i provide any further info !? What more can i provide ? Does this sound like a delaying tactic ? What should my next steps be ? Any info would be greatly appreciated. Thank you.
Rachel says
Hi Sara,
I currently have a £9,000 loan with Amigo Loans – for a car. But now I have got a good job and my credit rating is starting to improve I would like to buy a house. Would having an amigo loan affect my ability to get a mortgage?
Thanks you
Rachael
Sara (Debt Camel) says
Yes, but indirectly – not because it is from Amigo but because the very high monthly payments will impact on affordability calculations by mortgage lenders.
How long until your loan ends? How good is your credit score now? Do you have any unpaid defaults on it or other debts with missed payments which aren’t yet settled?
Keith says
Hello,
I recently had a successful irresponsible lending complaint upheld by Amigo without having to go to FOS. I received a large sum of money back and negative markers removed from my credit file. I have also been successful with other lender complaints and my credit score is gradually improving.
My question is – When I apply for a mortgage will having multiple guarantor loans on my report affect my chances of being accepted or be questioned by the underwriters? Although the multiple loans have lots of “green ticks” now, I’m worried that this type of product shows poor money management and considering how recent they are a mortgage lender may require an explanation?!
I have asked Amigo to delete the loans completely as a gesture of goodwill, on the basis that all upheld complaints should put the borrower back in the position they would have been in if they had not been loaned money. I am now questioning whether having lots of “green ticks” may be better for improving my score.
Your advice would be greatly appreciated.
Many thanks
Keith
Sara (Debt Camel) says
I would be surprised if Amigo agrees to delete the loans.
They don’t harm the credit score you see and they may help it, how much depends on the rest of your credit record BUT a mortgage lender does not look at the calculated score that you can see, they look at the actual records. So what can they see?
A mortgage lender can’t see the names of the lenders on your credit record. There is a special marker against payday loans and if you had a lot of them (or ANY, even one, in the last year) you are likely to find getting a mortgage hard. But guarantor loans are not flagged up.
It may still look like a lot of borrowing though. I haven’t heard of a mortgage lender objecting to this – if even querying it – but I suppose it’s possible.
I suggest you talk to a mortgage broker, not make an application direct to a lender. And if you had ANY payday loans in the last year you probably need to delay an application.
PS don’t get a mortgage from a bad credit lender. Having dug yourself out of the Amigo trap, paying 5% on a mortgage may not sound a problem, but you cannot be sure you will bd able to remortgage in a couple of years onto a better rate, don’t trust a broker who says you can. Better to wait a couple of years.
Keith says
Thank you very much for your insightful advice.
I’m hopeful and reasonably confident that I’ll be at a point by September where I have no defaults/ no CCJ’s at all and no missed payments for well over 12 months. All payday loans should be roughly 2 years old + .
Just out of curiosity what impact do payday/home credit loans have once they are older than 12 months? Will they be queried? If accepted, will they affect the rate I’m given?
Also, at what point, (if at all), would you say it is possible to get a mortgage with a reputable lender with a default on your record? I’m aware that they dilute as they get older and have read that some mortgage lenders may accept paid defaults that are older than 2 years.
Many thanks for your help.
Sara (Debt Camel) says
Just out of curiosity what impact do payday/home credit loans have once they are older than 12 months? Will they be queried? If accepted, will they affect the rate I’m given?
There aren’t any set rules here. It is a very good rule of thumb that your payday loans need to have been over a year old, but it’s completely up to the lender if they care about older loans. Some do, Some don’t. I would be concerned that if you had a lot eg 50+ you would have more problems than if you only had 5, but this is a guess and not based on any knowledge. This is why you MUST go through a broker, not direct to a lender.
re defaults, until recently a good rule of thumb was that to get a mortgage with a high street lender at an OK rate any defaults have to be over 3 years old AND have been settled for more than a year.
But I can’t guess what the mortgage market will be in the next year or two. You should expect to need a 10% deposit at least.