Published on June 29th, 2015 | by FinanceLoophole2
I Can’t Pay My Amigo Loan Debt
Finding an affordable loan can be very difficult for an increasing number of people. This is especially true for those who have got a damaged credit history, or no credit history at all. Many people do however take out loans with less affordable loan companies such as Amigo Loans – during the present financial climate in the UK this is perfectly understandable. If people cannot make the repayments on their loan it can have a big impact on their future finances. With Amigo guarantor loans it will also have a financial impact on the finances of the guarantor if a borrower cannot pay back the loan. Amigo loans provide unsecured loans for people with bad credit ratings and CCJ’s which would normally make it difficult to get any credit without resorting to a loan companies such as Amigo. But what if you can’t pay your Amigo loan?
You can get an Amigo loan as long as you can find a friend who owns their own house who will guarantee they will pay your loan if you cannot. Guarantor loans are not a new idea; it is how banks used to lend to customers before computer credit scoring took over and is a trust-based system, with one difference – the extortionate interest rates which Amigo charge.
Amigo Loans is one of the biggest guarantor loan companies with over 100,000 customers. The company, which is part of the Richmond Group of companies, has advertised on daytime TV featuring cheery Mexicans claiming that “friendship and trust make the world go round” now its adverts feature less stereotype jolly claymation “morph” animated people.
One of Amigo’s main selling points is that they don’t charge extra for late payments, letters, early settlement or anything else on top of their loan. However in the small print it says – “if you fail to pay on time you will have to pay more interest” – so late payments will actually see your debt rise.
Amigo offer loans ranging from £500 to £5000 – for loan repayment periods of 12 to 60 months. They promising to get the money to you within 48 hours. You can speed up the application process by setting up the loan online, they reckon they can turn around an application in just 24 hours – depending on how easily they can accredit your guarantor.
How Can I Pay My Amigo Loan?
It is very easy to get a loan from Amigo with its 5 minute application process (as long as you can get a guarantor for your loan). However many people find they fall behind on the repayments when they are paying back the sum they have borrowed on top of the crippling 49.9% APR (variable) currently advertised interest rate. This can result in your guarantor getting pestered and harassed by Amigo loans for repayment when you fall behind.
If you are struggling to pay back that Amigo loan you do have rights and the loan company is not allowed to use bullying tactics to get money out of you or your guarantor. The first thing you need to do is make sure you know your rights and how to deal with your loan company.
If you default on the loan, or fail to keep up with payments, the lender will ask your guarantor to pay your shortfall. They will also chase you for the remainder of the loan plus any interest, and in some instances may take both you and your guarantor to court.
If you and your guarantor don’t pay your loan back to Amigo they will pass your debt onto a professional debt collector. They will also turn to the courts to deal with you and your guarantor. So don’t delay as it is not sensible to just ignore Amigo loan repayments. However they cannot put your home, nor that of your guarantor at risk as an Amigo Loan it is not a secured loan.
If you or your guarantor are having problems making your Amigo guarantor Loan debt repayments we can help you – just fill in this form with your details and we will get back to you. Or fill in the “help me now” form on the right side of this page with your question and I will get back to you as quickly as possible. We can work closely with you to make sure that your Amigo loans debt management plan is giving you the results you are looking for.
Building Your Credit Score With Amigo Loans
Amigo say that as part of their service they want to help make your financial future better. They do this by reporting back each month to all three major credit reference agencies. They show your repayments, so if your repayments are made on time this is likely to help rebuild your credit worthiness. However this can go the other way – if you don’t make the repayment they will also report this back to the credit reference agencies, resulting in a worse credit rating for you. None of the information about your guarantors is reported back to the credit reference agency, even if your payments are missed. But they will however report your guarantor if the case ends up in court because they do not pay your debt for you.
What Amigo Loans Say If You Miss Your Payment Dates
“If for any reason you can’t pay, you need to speak to us so we can work with you to try and come to a reasonable resolution. If your payment is not received on the due date you selected, we will notify both you and your guarantor as soon as we are aware. We’ll always try to come to a resolution with you first. If we’re unable to do this, or if we can’t get hold of you for two weeks, we’ll let your guarantor know and then collect payment from them.”
What Happens If My Amigo Loan Guarantor Can’t Pay?
Amigo will make a check on your guarantor before they pay out the loan to you. They will run credit checks and conduct any affordability assessment with your guarantor prior to providing you with a loan to ensure that your guarantor is capable of taking on the financial commitment if you default on your loan repayments. This check makes sure that they can stick to their promise to make your repayments in the event you cannot, and these loan repayments will not put them under any undue financial strain.
If the guarantor is not financially capable of upholding their responsibility, then Amigo Loans company will establish what has caused this situation. They will work with the guarantor to get them back in line with their agreement. If they cannot sort their repayments out then are likely to take further action, which may involve legal action.
As an Amigo Loan borrower who is having problems making repayments, you will be more than likely to inform your guarantors in advance if you are struggling with your monthly repayments. We strongly advise you to do this as it will give your guarantor time to budget for your payments. This will hopefully stop you from falling into arrears and will avoid any legal action from Amigo.
OK What Are My rights for an Amigo loan?
The official guidance from the Office of Fair Trading says that;
- lenders must treat borrowers fairly
- must work with the borrower to help them come up with a plan to repay their debt
- Any action taken by the lender must be proportionate.
How To Contact Amigo Loans
Applications: 01202 629 200 (9am-7pm Mon-Thu, 9am-6pm Fri, 9am-1pm Sat)
24 hour payment line: 01202 560 996
Collections department: 01202 629 161 (8am-8pm Mon-Thurs, 9am-6pm Fri, 9am-1pm Sat)
Looking For Someone In Particular/Complaints?
Registered in the UK, number 4841153. Registered Office: Walton House, 56 – 58 Richmond Hill, Bournemouth, BH2 6EX. Registered with the Information Commissioners Office Z8738456. Financial Conduct Authority Permission Number 557709. Amigo Loans Ltd are a part of The Richmond Group. VAT Number 945758376.
Thinking Of Becoming An Amigo Loan Guarantor
Guaranteeing an Amigo loan as with any other credit contract you enter into makes you responsible for paying the debt if the borrower fails to keep up with their payments to Amigo. So being a guarantor is risky. If you are considering this route make sure you know exactly what the implications are, and most importantly make sure you know that the person taking out the loan that you are guarantor for will pay the loan back or you will have to pay it for them.
Things To Consider Before Agreeing To Be A Guarantor?
Before you agree to be a guarantor, you need to ask yourself:
- Why do they need a guarantor
- Are you guaranteeing for a responsible borrower
- Is the loan sensible
- Would you be willing and able to pay if the borrower won’t or can’t pay it back – debt recovery costs may also be involved
- This is not a secured loan so your house in not at risk
- If in doubt, seek legal advice first
Can It Affect My Credit Score?
It unlikely that a record of the loan agreement will appear on the guarantor’s credit report (as would be the case if it were a joint credit agreement). If the payments were defaulted then this would change and it would indeed impact your credit rating.
If there were defaults, you may well see a default registered on your credit report. If payment were still not made, perhaps a county court judgment as well. So, as long as borrower pays the agreement on time every month the debt will not show on your credit report and should, as a result, have no impact on the guarantor’s credit rating.
Amigo carries out a ‘soft search’ on guarantors. This involves a check on your credit history and any track record you have for repaying debt. This soft search is visible on the guarantor’s credit report but it will not impact your credit score as if you were applying for credit themselves.
Alternatives To Guarantor Loans
If you posses a good financial track record yourself and want to help out a friend who has a bad credit score, there are much cheaper/better alternatives than using guarantor loans like Amigo Loans (including Amigo’s sister company FLM Quick).
You should seriously consider simply lending the money to your friend yourself – if you can afford it. It does not come without it’s risks; if your friend doesn’t repay the money you could end up losing not only your cash but your friendship as well. But this is just as likely to happen if you are a guarantor for and Amigo loan and they default on their payments.
Make sure that your friend can afford to pay the money they borrow back to you. If you’re happy they’re able to, it’s a good idea to draw up a written agreement or contract which lists all the agreed terms of the loan including when repayments will be made and interest charges etc if you have have any. Include what happens if your friend fails to keep up with repayments to you.
If it’s for a significant amount it may be worth getting legal advise prior to signing any agreement. And bot you and your friend need to sign it in the presence of independent witnesses.