It is easy to see why people who were in the position of needing a loan were attracted to guarantor loans. A guarantor loan can make borrowing money more affordable and manageable. Companies like Amigo Loans have developed a friendly image, making people feel as though this is a lender that cares, and who is looking out for borrowers who require financial assistance.
It is not as though Amigo Loans are a terrible company, or that they are doing anything wrong. However, there are many issued associated with this type of loan. The number of problems related to this style of loan hides the frightening truth about your costly Amigo Loans, and it is vital people are aware of these problems, and how to resolve the matter.
If you cannot afford to make your guarantor loan payment, Amigo Loans will turn to your guarantor. They might claim the amount from them, or they might take the payment directly from their bank account.
At the point of signing up for the loan, the borrower and guarantor will likely have provided permission for Amigo Loans to take Continuous Payment Authority (CPA). This is often a condition of the guarantor loan being approved, and it can cause a lot of problems.
Many guarantors have suffered because of lending companies, such as Amigo Loans, have taken payments directly from their account. If the guarantor is unaware of this payment is due, they might not have sufficient funds to cover it. Alternatively, this payment might lead to the guarantor being unable to meet other fees, causing financial difficulty for them.
Sometimes debt collectors get involved
If the lender has been unable to collect money owed to them, they will often undertake the normal debt collection process. This can involve a collection agency taking on the debt, and these organisations are often relentless in pursuing money. Alternatively, court action might be raised against the borrower and/or guarantor.
Dealing with court action or a debt collector can be extremely stressful. Coping with money worries causes problems in many parts of life, so the added stress of facing court action or being pursued by a professional debt collection agency will only exacerbate the worries at this time.
Your credit file will be affected
Defaulted payments will be recorded on the credit file of the borrower and the guarantor. This can make it harder for either of these parties to arrange finance in the future. This might hamper your plans for homeownership.
There is also a human cost with debt
Money worries place people under pressure, and this often impacts relationships. You can imagine how strained relations will be between a borrower and their guarantor if problems have arisen due to payments being missed.
There are significant problems associated with costly Amigo Loans, but help is available in reclaiming payments. Anyone looking to make a successful claim against Amigo Loans, or any lender of this nature, should seek guidance from professionals with a strong track record in this field.