Amigo Loans puts itself on the market – what it method for borrowers and really should you still repay loans? – The Scottish Sun

GUARANTOR loans firm, Amigo, has put itself on the market when confronted with what it calls a "challenging operating environment" that's seen other similar lenders go below.

While the lending company says it "remains confident", its owners say they are concerned by "increased pressure" and just what they are saying is the changing approach of the Financial Ombudsman Service to complaints.

Payday loan complaints soared by 130 per cent in 2023 (the most recent figures available) using the Ombudsman dealing with nearly 40,000 new complaints.

And when Wonga went bust, it said it couldn't deal with interest in mis-selling compensation, which saw complaints about unaffordable loans rise threefold.

Just this past year, payday lenders 247Moneybox, Piggybank, QuickQuid, The cash Shop and Payday UK, and WageDay Advance also all collapsed into administration.

Amigo Loans, that was founded in 2005, is slightly dissimilar to payday lenders for the reason that it offers loans on the longer time frame of 12 to 5 years at a lower rate of interest of 49.9 per cent.

Its loans are known as "guarantor loans", which is whenever a friend or family member guarantees that they'll stump in the cash if the borrower falls behind on repayments.

Here's what's happening at Amigo and just what it means for new and existing borrowers.

What's happening?

Richmond Group, which owns both largest and controlling stake from the Amigo Loans business at 61 per cent, has today put its area of the business on the market in addition to launched a review of how the lender is run.

This review will looks at Amigo's strategy, operating model, and ownership, and look at if the entire company or areas of the company should be sold.

At time of writing, no offers for that company had been made, but Amigo has provided your customers a deadline of February 17, 2023 to get in touch.

It said hello couldn't give any timescales for which might happen after this as it depends on whether there's any curiosity about buying the company.

What does this mean in my loan?

Existing borrowers should still repay their loans normally, as Amigo says it's business as usual for the time being.

It wouldn't speculate on whether things could change within new owner.

If the firm ends up going under that doesn't suggest your loan is going to be wiped as it's likely you'll keep having to settle what you owe to the administrator that takes over.

What about new borrowers?

New borrowers could take out loans with Amigo as always.

Just think carefully before you decide to do – are you able to borrow more cheaply elsewhere first? For instance, having a personal bank loan from the bank or a charge card.

Use eligibility checkers in the likes of MoneySavingExpert to check whether you're likely to be accepted without it hurting your credit report.

If you're struggling, make contact with a free debt advice charity, such as Citizens Advice.

There are various free tools to help you reclaim mis-sold payday loans, for example one from MoneySavingExpert and another from DebtHacker.