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.
Use this template as a basis and make any changes so it reflects your case:
Change that so it is right for you and email it to firstname.lastname@example.org.
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 the 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.