Amigo Loans suspends most new lending due to coronavirus
Subprime lender Amigo Loans will temporarily only accept new applications to borrow from key workers in emergency situations, blaming the move on "the current Covid-19 situation".
Amigo Loans is known for offering 'guarantor loans' – where a borrower who's struggled to access other types of credit can get a loan by nominating a friend or family member to be their 'guarantor'. The guarantor will then become responsible for paying back the loan if the borrower is unable to.
Amigo also offers products such as bad-credit and debt-consolidation loans – all at high interest rates of 49.9% representative APR.
But it's now temporarily suspended all new borrowing except for those working in critical sectors. It says this will allow it to focus on helping existing customers.
For more info on the financial impact of the coronavirus pandemic, including help for those struggling, see our constantly updated Coronavirus Financial Help & Rights guide. Also see our Reclaim guarantor loans guide.
How is Amigo Loans restricting new lending?
Amigo Loans has temporarily stopped nearly all new lending – but it says it will still take applications from key workers who are in "emergency situations".
Amigo says it's using the Government's definition of a 'key worker', which includes people working in sectors such as health and social care, education and food production and retail. For a full list of key workers see the Gov.uk website. We've asked Amigo what it would count as an "emergency situation", and will update this story when we know more.
Be extremely wary before considering taking out a guarantor loan. Like payday loans, guarantor loans are approved quickly, and are marketed to borrowers with poor credit histories. While their interest rates are not as high as the up-to-1,250% rep APR charged on payday loans, guarantor loans tend to be a very expensive way to borrow. For more info, see What is a guarantor loan?
How are existing Amigo Loans customers affected?
This announcement doesn't have any direct impact on those already borrowing from Amigo Loans, but the firm says any existing customers who are worried about their payments for coronavirus-related reasons should contact it directly.
Each customer's situation will be reviewed on a case-by-case basis, and arrangements can be put in place based on the individual's circumstances.
We've asked Amigo what specific 'forbearance' measures it will consider to help existing customers, and will update this story when we know more.
You can get in touch with Amigo by sending an email or calling 01202 629161 – though Amigo has warned that there are much longer waits than usual on its phone lines, and has urged customers only to call if their query is urgent.
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