If you have a guarantor loan either in place or have one or a number in the past then there is a good chance that the firm lending the money did not complete a sufficient number of suitable checks in order to provide the finance. If this is the case then you could well be entitled to compensation through a refund of interest on the amount borrowed.
What is a Guarantor Loan?
A guarantor loan is a loan facility taken by an individual who otherwise due to their financial record would be unable to obtain finance. The loan taken being backed by a third party which is normally a friend or relative. If the borrowing is defaulted upon then the loan company can pursue the guarantor for payment.
The loans due to the risk associated with the borrower normally attract a high interest rate.
Guarantor loans have a poor reputation due to the fact that the borrowing is granted to those in financial difficulty or with a record of either financial constraint or lack of justification for the borrowing through traditional lenders. This risk to the lender means they believe that they are justified in charging considerably higher interest rates against the borrowing which is agreed.
Sadly firms have profited considerably regarding this form of lending charging excessive interest against borrowing which has not been correctly scrutinised before being agreed.
Can I get out of a Guarantor loan as a Borrower?
If you have a guarantor loan in the past or currently have one running there is a good chance that if a mis-sale can be established that any refund would clear the balance or a large proportion of the balance outstanding. It can also if the borrowing is clear largely cleared provide a considerable refund taking into account the interest you were charged.
Can I get out of being a Guarantor on a Loan?
Will I get enough to reply my loan?
As the main focus with regard to any mis-sold guarantor loan is the interest applied and compensatory interest which can run into considerable sums and in total over take the amount originally borrowed any refund is likely to clear the vast majority if not all of the borrowing
Can the Person Guaranteeing the Loan Claim?
As a borrower you can of course make a claim in relation to the loan facility that you took. However, the case is also true that anyone who has guaranteed the borrowing and had to pay money to the firm under this guarantee can also make claim. We represent a number of clients both acting for the borrower and the guarantor as the claims are entirely separate. Neither affecting one another.
If you are a guarantor of a high interest loan for an individual and you have been called upon to make payment with regard to this loan as a result of the borrower defaulting then you can look at making a claim against the lender for the sums you have paid.
Why Act a Guarantor on a loan for someone?
Guaranteeing a loan for someone who is likely to be a friend or relative always seemed like a good idea at the time in order to help them in their time of financial need. Unfortunately you should as a guarantor have been made fully aware that in the event of default you would be required to meet the commitment of that borrowing.What started as an act of help and assistance can turn very quickly into a costly exercise.
Why are these Guaranteed loans so bad?
Guarantor loans are notoriously bad not only due to the high interest charged to the loan but also the nature of the loan itself. In that those that apply and obtain this form borrowing are unlikely to be able to apply for borrowing elsewhere due to a poor credit rating or other financial factors which mean the normal loan lenders are not an avenue the borrower can explore.
Guarantor loan firms provide assistance at a tremendous cost as the interest rates charged high. Sadly the protection for the guarantor is not as good as it should be as the correct and appropriate checks on the clients finances are in many cases not taken.
How do I know if the Guarantor loan was Mis-sold?
How would you know if your guarantor loans mis-sold?, we would need to establish that the lender did not undertake the correct level of searches or obtain sufficient information to make a professional judgement in agreeing to the finance provided by the guarantor loan.
Any borrower is protected by requirements provided by the regulator to lenders in order to establish if an individual can borrow monies which are ultimately affordable and appropriate for their needs. Should this not be the case then a mis-sale may well have occurred.
The guarantor loan could have been mis-sold if the firm did not take into account the borrowers specific financial circumstances and requirements. That the firm did not undertake a search of the financial history of the potential borrower including information regarding other outstanding financial commitments.
In turn if these checks were not undertaken then the firm was not providing you as a guarantor with the protection it should have done in assessing the loan application correctly. If the borrowing was provided without the correct checks then there is a good chance the loan was mis-sold and any financial commitment paid or provided by the guarantee should be addressed.
Will the Borrower Named on the Loan Need to Claim?
Claims against guarantor loans can be made into parts which are both completely separate. As a guarantor you can make a claim in relation to the payments that you have made and commitment you have under the guarantee. Likewise a borrower can make a separate claim in relation to the payments they have made or committed to under the borrowing.
We have represented both borrowers and guarantors with individual claims.
Can any Compensation Refund Repay the GuarantorLoan?
The claim of a guarantor is making relates to the monies they have paid against the guarantee provided should there have been a default. In addition the guarantor will also be claiming for any requirement to continue with that guarantee to be removed.