Amigo Loans Contract: Understanding the Terms and Conditions

Amigo Loans is a UK-based lender that provides guarantor loans to individuals who may have difficulty securing traditional loans due to their credit history. Guarantor loans require a third-party guarantor, typically a family member or friend, to co-sign the loan agreement and take responsibility for repayments should the borrower default. Before signing an Amigo Loans contract, it is important to understand the terms and conditions of the agreement.

Loan Amount and Repayment Term

The loan amount and repayment term are outlined in the contract and should be agreed upon by both the borrower and the guarantor. Amigo Loans offers loans from £2,000 up to £10,000, with repayment terms ranging from 12 to 60 months. The repayment term will impact the amount of interest paid over the life of the loan, so it is important to consider this when agreeing to a term.

Interest Rate and Fees

Amigo Loans charges a fixed interest rate on their guarantor loans, which is agreed upon at the time of application. The interest rate will vary depending on the borrower`s credit history and other risk factors. In addition to interest, Amigo Loans may charge fees for late payments or early repayments. These fees should also be outlined in the contract.

Responsibilities of the Guarantor

The guarantor is responsible for making loan repayments if the borrower is unable to do so. It is important for the guarantor to understand their obligations before signing the contract. The contract should outline the guarantor`s responsibilities, including when repayments are due and how they will be made.

Early Repayment Options

Borrowers have the option to repay the loan early without penalty. However, if the loan is repaid early, the total interest paid over the life of the loan will be higher. This is due to the fact that Amigo Loans charges interest upfront, based on the total amount of the loan.

Default and Collection Practices

If the borrower defaults on the loan, the guarantor will be responsible for making repayments. Amigo Loans may also engage in collection practices, which could include contacting the borrower and/or guarantor, reporting the delinquency to credit agencies, and taking legal action to recover the debt.

Conclusion

Before signing an Amigo Loans contract, it is important to carefully review the terms and conditions. Borrowers and guarantors should make sure they understand the loan amount, repayment term, interest rate, fees, and responsibilities involved. By being informed and aware of the contract`s terms, borrowers and guarantors can make the best decision for their financial situation.