Bookkeeping

Amigo Loans goes on sale – what does this mean for borrowers and do you still owe the loans? – The sun

GARANT loan company Amigo has gone up for sale in what it calls a “tough operating environment” that has seen other similar lenders go bankrupt.

While the lender says it “remains confident,” its owners say they are concerned about “increased pressure” and what they say is the Financial Ombudsman Service’s changing approach to complaints.

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Amigo Loans has gone up for sale, although there is no change for borrowers at this time.

Payday loan complaints climbed 130% in 2018 (latest figures available), as the Ombudsman took on nearly 40,000 new complaints.

And when Wonga filed for bankruptcy, she said she couldn’t keep up with the mis-selling compensation claim, which saw complaints about unaffordable loans tripling.

Last year, payday lenders 247Moneybox, Piggybank, QuickQuid, The Money Shop and Payday UK and WageDay Advance all collapsed into administration as well.

Amigo Loans, which was founded in 2005, is slightly different from payday lenders in that it offers loans over a longer period of 12 to 60 months at a lower interest rate of 49.9%.

Are you owed a payday loan repayment?

MILLIONS of payday loan customers can be repaid.

Repayments or compensation are often given when the loan has been mis-sold or when affordability checks were not strict enough. Here’s all you need to know:

  • Customers who have paid off their payday loan debts can still claim. Even if you have paid off your debts, you will still be able to get a refund if you struggled to repay the money at the time.
  • If you are still paying off your payday loan debts, you can still complain. You can complain if you had trouble paying back. If your complaint is successful, it could reduce the amount you owe.
  • You can always pretend that the business no longer exists. When payday lenders go bankrupt, you can still submit claims to the business administrator, although you are less likely to receive a refund as you will only be one of a long line of people who owe money. Also check the claim deadlines as some administrators, like those at Wonga, have imposed deadlines.

Its loans are known as “collateral loans”, which is when a friend or family member guarantees that they will accumulate money if the borrower falls behind in repayments.

Here’s what’s going on at Amigo and what it means for new and existing borrowers.

What is happening?

The Richmond Group, which owns both the largest and controlling stake in Amigo Loans at 61%, today put its share of the business up for sale and launched a review of how the lender is handled.

This review will examine Amigo’s strategy, operating model and ownership, and examine whether the entire business or parts of the business should be sold.

At the time of writing, no offers for the company have been made, but Amigo has given interested parties a deadline of February 17, 2020 to get in touch.

He said he could not give any timeframe for what might happen after that as it depends on whether or not to buy the company.

What does this mean for my loan?

Existing borrowers should continue to repay their loans normally, as Amigo says it’s business as usual for now.

He wouldn’t speculate on whether things might change under a new owner.

If the business ends up going bankrupt, that doesn’t necessarily mean your loan will be canceled as chances are you’ll have to keep paying back what you owe any director who takes over.

What about new borrowers?

New borrowers can continue to take out loans with Amigo as usual.

Think carefully before you do – can you borrow cheaper elsewhere first? For example, with a personal loan from a bank or a credit card.

Use eligibility checkers like MoneySavingExpert to check if you are likely to be accepted without harming your credit report.

If you’re having trouble, turn to a free debt counseling charity, such as Citizens Advice.

There are various free tools that can help you recover badly sold payday loans like one from MoneySavingExpert and one from DebtHacker.

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