Loans2Go offers what I have called the worst loans in Britain.
In 2019 a reader told me about a loan from Loans2Go at 990% interest over 18 months.
In 2021 they reduced the interest rate to “only” 770%. But it is still much cheaper to get a payday loan! 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.
With a payday loan for £550, the maximum interest that could be charged is £550 – the amount borrowed – so you would repay £1,100. And the monthly repayments for this payday loan can’t be more than £92.
So you would pay a payday lender £92 for 12 months
but Loans2Go is charging £113 for 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.
How can a lender charge more than a payday loan – is it 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 these 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 datiled 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.
How to complain
First 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 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.
A good idea to send your bank statements
If L2G ask for bank statements, send them if you have them. They will prove your point that the loan isn’t affordable.
If you don’t have them, this is a good time to get them as they are very likely to be needed at the Ombudsman. You can get statements even from closed accounts within the last six years.
Have Loans2Go made you a poor offer?
You can send your complaint to FOS if Loans2Go have rejected it or have 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.
If L2G have offered to wipe a small balance or take some money off what you owe, is this a good offer?
Sometimes they 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.
Refunds from large loans inc car finance
Can you get an overdraft refund?
SafetyNet Credit – very expensive debt
Kate says
In 2018 i took out a loan with loans 2 go. At the time i was in the worst situation and desperate for money which was used to clear other debts and it just spiralled out of control.. eventually cleared my balance and still disgusted of them for taking advantage of my sitaution. I took out a £1000 loan and had to pay back £4113. Ive copied and pasted the template hopefully i can get something back from them.. how long isit until they have to respond.. thanks
Sara (Debt Camel) says
8 weeks. Unless you get a good offer, not just a few hundred, I suggest you send this to the ombudsman if repaying the loan caused your big problems
Kate says
Ive just had a letter from l2g and as a gesture of goodwill they are offering me £150. They are saying all correct check were made and that the loan was affordable to me. Will that be there final offer or is there anything else i can do before going to the financial ombudsman
Sara (Debt Camel) says
They will sometime negotiate. But probably not more than a few hundred more. They seem happier to reduce people’s balances than pay out cash when a loan has been settled.
If you go back and say you will accept £1500 or whatever, say your complaint goes to the ombudsman in a week if they don’t accept this. One person here tried to negotiate, sent them info they asked for, but ended up missing the 6m time to go to FOS. So don’t let them string you along – one week max then go to FOS.
Kate says
Do they usually respond with a offer or tell me to take it to the fos.
Thanks
Sara (Debt Camel) says
All these cases are quite individual. Realistically they have offered you a tiny amount, they aren’t likely to make a good offer. So it may be best to simply send the case to the ombudsman now.
Most of the people who they will negotiate have a significant balance owing on the last loan, that isn’t you. But these things are unpredictable, I can’t say it definitely isn’t worth trying to get more.
Roy says
I have been out of work for 10 years but I got a 1000£ loan off loans 2 go I have paid back roughly 2400 but still have 1300 to go of which I am struggling and am now on a payment plan .. at no stage was I asked for bank statements before receiving loan do you think I have a case against them
Sara (Debt Camel) says
Yes. Send them a complaint.
What other debts do you have? Most people with Loans2Go have a other expensive or problems debts – nothing is as expensive as L2G should Lao look at affordability complaints against the others as the cost of those probably led to you taking this horrible loan.
Are your renting? Social or private? Are you behind on any bills?
Roy says
Live with a relative .. am in debt with others..loan was only for 1000 with interest want 3800 back .. paid off about 2400
Sara (Debt Camel) says
How large are your total debts?
Roy says
Including credit cards and other loans about 6000
Peter says
I have been arguing with this company for the last 3 months now, telling them I didn’t agree to such stupidly high interest rates and that I agreed to borrow £1000 and pay back £1500 over 18 months.
Friday they emailed saying they’ve cancelled the agreement and are now looking at 1 of 3 options, contacting employed for attachments to earnings, or taking my car or taking me to court and getting a warrant to remove goods.
I’ve just emailed them the template above so will update as and when they reply.
I told them I would pay back £1500 minus the £200 they took 9 days earlier then what was agreed in the contract which caused me issues but they wasn’t having none of it. I told them I would of never agreed to the rates they charge because I couldn’t afford £200 per month over 18 months, which would make a £1000 loan after paying £3600 which is day light robbery.
I applied for £1000 pay back £1500 over 18 months, didn’t hear nothing for about a week then money was in my account, wasn’t made aware of the high interest rates or even contacted to see if I still wanted the loan.
Sara (Debt Camel) says
Could you copy and paste the bit about taking your car please?
Peter says
Please note that this letter constitutes notice to you that we may now commence proceedings to issue legal proceedings for the recovery of monies owed or if applicable, commence proceedings for the recovery of the security vehicle. If proceedings are issued you will become liable for additional costs involved.
Sara (Debt Camel) says
ah ok, “the security vehicle” sounds is a leftover from when Loans2Go did logbook lending, which was secured on your car. Yours is just a standard loan I assume – so you can ignore that.
All of the other 3 “options” will require them to have gone to court for a CCJ first.
Peter says
Yes just a standard loan. I’ll update as and when they reply. Thank you
Sara (Debt Camel) says
OK so you have objected to them the loan was never properly described to you, and also complained about ehm taking the 200 too early, and you have now made an affordability complaint. Good.
They may come back with an offer. A good offer is to remove all the interest leaving you with 1300 to pay and allow you to repay at a lower more affordable amount eg 50.
Loans2Go has a habit of making rather poor offers… sometimes they can be persuaded to improve these. Leave another comment here if this happens. But some cases have to go to the Ombudsman.
Loans3Go should not start court proceedings while this is going through. Let me know if your receiver a Letter before Action/Claim – see https://debtcamel.co.uk/letter-before-claim-ccj/
Mo says
Hi Sara the Financial Ombudsman got back to me and they have took my side and loans2go have accepted they should not have gave me a loan so I’m getting back all the interest I paid.
Thanks for your help it’s much appreciated.
Laura says
I have just raised a complaint to them regarding my loan from earlier in the year. I regretfully borrowed £1000.
Backstory – my credit score is very low due to an IVA that has long finished. I have been clearing up my credit report and have since obtained credit cards as a reset essentially (following post clean up advisories of credit report)
Due to unforeseen circumstances, I needed money quickly and no panel of lenders would look at me twice with such a low score, it was such a blow so when I applied and this company accepted, I bit their hand off.
A few months later, the monthly £205.56 payment was taking it’s toll on my outgoings so I opted for an early settlement and thankfully a different loan company (Salad Money) accepted my request. Not only were the funds in my account the same day after an application that took no longer than 15 minutes to complete (with wageslips for proof), they offered me the loan with zero interest for the year so I am now paying £83 for 12 months as oppose to £205.56 for 18 months.
Fingers crossed I receive a response from L2G within the next week, will update you once I hear back.
Sara (Debt Camel) says
Good luck with this.
But why is an IVA that finished a long time ago still affecting your credit score?
Nathan says
Wish I’d read this article sooner! Please be careful before agreeing to a loan from this company! £1000 loan over 18 months for a total repayment of £3708.08 costing £205.56 per month. Having had the loan for 1 week I have already incurred £84.55 in interest charges. My circumstances changed and I made a payment of £450 (soon to be more). I perhaps didn’t read the contract as thoroughly as I should have but I have found out this doesn’t affect / reduce the monthly payments (unlike any other companies in my experience) so they will still charge £205.56 per month and the overall total to repay over 18 months only dropped to £3,288.96. I will be paying the rest off asap so not to incur too much interest. As an example of how bad this company is on terms of payment and interest charges I also had a Finio loan for the same ammount £1000 over 18 months and am paying £70 per month with a total repayment of £1,344.70 over the term of the loan… so if you do need a loan of this nature due to your circumstances please try other providers first, the fast payment pro is by no means worth paying WAY over the odds on a loan!