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?
Connor says
I recently engaged with an external company to file a complaint on my behalf against Loans2Go in regards to irresponsible lending. I took a £600 loan out in March this year, having to pay back ~£2200. I instructed said company, during my 14 day cooling off period, I wished to cancel it and carry out the complaint myself after reading this website.
After contacting Loans2Go I have been forwarded a final response, already sent to the external company, which doesn’t go in my favour. They noted they requested bank statements which were never sent as they were never requested from me.
Can I use the final response letter to go to the FOS now, or what are my next steps? Any advice would be appreciated, feeling like I’m at a bit of a road block now at no fault of my own. Also, my SAR (which Loans2Go did send me at my initial point of contact) is account notes, no credit check etc.
Sara (Debt Camel) says
You can send the bank statements to L2G and ask them to review their decision because it goes to the Ombudsman if they don’t make an acceptable offer.
BUT you only have 6 months from l2G’s first decision to go to the Ombudsman. Don’t let them drag this out so you are over the limit.
Courtney says
Has anyone found that loans2go has a really bad effect on your credit file I’m currently trying to pay mine off I got this loan out March of 2023 £700 was the loan amount I wanted, I’m now paying 15% APR ( I didn’t know of this until I’ve just looked through the contract that has been signed for me off loans2go) and they gave me this contract after it had all got sorted I’m now paying back £143.89 per month over 18 months it works out at £2,590.02, I couldn’t keep up the payments so I’m now still paying this back, I’m now petrified that when I do pay this loan off it’s still going to have a negative effect on my credit file for years to come.
Any help is appreciated.
Sara (Debt Camel) says
Main an affordability complaint as described in the article above. Not only will that reduce the amount you have to pay, it may also help clear up your credit record
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.
Paul says
My son got into trouble with gambling where he used this company for a loan to use for gambling. He got a £1000 loan from them, they are looking at over 3000 back, i have taken over running of his bank and accounts etc and he is getting help with his addiction. Do you think they would drop the interest if I explain the situation. Would I have a case due to my sons addiction and has been on a few occasions where he has lapsed.
Sara (Debt Camel) says
You are hoping they will be sympathetic? No chance.
But should your son have been lent this? Had his debts been increasing? Were the repayments affordable?
How much else does your son owe? Loans2go may be the worst, but by the time someone is so desperate as to borrow from them, they normally have a lot of other expensive borrowing too. Look at affordability complaints against all of them too.
BUT Does he have any assets? If he he’s relapsed several times, there are arguments in favour of bankruptcy, as making it massively harder for him to borrow for the next 6 years. And removing the mental pressure caused by debts can help make it easier to stay clean.
Paul says
Thanks Sara.
Yes I’m afraid his debts has been increasing the whole time. This is not the only loan he has taken out for gambling.
I wouldn’t say the repayments have been affordable as he has had to go into debt for his car loan which he has too as they are taking near 300 a month from him where his car loan is 260 a month. That’s not including all the other money lending he has done through friends and family which I am trying to pay back by managing his finances. The car loan is about 4 months behind in the repayment plan due to this company taking the payment out of the bank as soon as his wage goes in. I even changed his bank card to try and stop them but they are still taking it. Is there anything I can do to stop them taking the amount automatically out the bank and then arrange a repayment plan? I’m thinking maybe that he will have to go on some debt management plan but as he has a few debts to friends and family, i don’t think this would be taken into account. Even if have bailed him out previously to near 2000 on his last time he lapsed.
Any help would be appreciated, thanks.
Sara (Debt Camel) says
Who is the car loan with?
total debt amount not including friends and family?
And how large are the friends and family?
Paul says
Car loan is with MBNA. Roughly 8000 left.
Total debt not including family is about 13000 including the car loan.
Owes family and friends near 6000.
Sara (Debt Camel) says
ok so that car loan is just a loan, not car finance, secured on the car? MBNA have sent this to a debt collector, what repayment agreed?
how much is the car worth? does he need a car?
how much does he earn a month?
what are his housing costs (rent, council tax, utilities etc)?
James says
Hi there, I need your advice on this, please
I took 2 Loans with Loans2Go
1) April 2024: £750 – paid back a total of £842.38 (1st installment of £154.17 + settled it for £688.21 less than a month after the agreement)
2) £650 July 2024 – paid back a total of £1002.05 (2 installments (£127.11 and £177.00 and final payment of £697.94 in September)
Do you think there’s room to challenge them with an affordability complaint, despite the loans being settled?
Thank you so much in advance for your opinions/suggestion
Sara (Debt Camel) says
where did the money come from to settle the debts?
James says
Thanks for replying Sara
To give you context, I used both of the Loans2go loans to clear other short term loans, then both of the times I took other loans before settling with Loans2Go
Sara (Debt Camel) says
So the most important thing is you have to STOP borrowing money to pay other debts.
Definitely complain to L2G – you only cleared the loans by borrowing – that doesn’t mean they were affordable.
But also complain to all the other lenders you have used in the last couple of years.
And next time you are in difficulty, don’t borrow more to repay some debt but ask for a repayment plan … or if you have a lot of other debts like cards talk to StepChange about a debt management plan for all of your debts.
James says
Hi Sara, I sent the email and Loans2Go replied few mins ago saying they are not upholding my complaint.
Please find below a detailed breakdown of the information used when assessing the affordability of your loans:
Principle: Loan Term: Total Payable: Total Paid: Status: Agreement date: 09/04/2024 £750.00 18 months £2,775.06 £842.38 Completed I note you declared your monthly income as £2,100.00 and we verified you received a minimum of around £2,050.47 monthly via an online income verification tool. Following an extensive review of your application and credit file, we calculated your monthly expenses to be around £1,426.41. Therefore, the contractual loan repayment of £154.17 monthly instalments per 18 months would have still been affordable.
Principle: Loan Term: Total Payable: Total Paid: Status: £650.00 18 months £2,287.98 £1,002.05 Completed I note you declared your monthly income as £2,171.00 and we verified you received a minimum of around £2,169.90 monthly via an online income verification tool. Following an extensive review of your application and credit file, we calculated your monthly expenses to be around £1,813.38. Therefore, the contractual loan repayment of £127.11 monthly instalments per 18 months would have still been affordable.
Any suggestions? Should I raise the dispute straight away with Financial Ombudsman?
Thanks
Sara (Debt Camel) says
Straight to the Ombudsman.