It's simple to file a complaint about a mis-sold guarantor loan. BOTH the guarantor and the borrower have the right to file a complaint. If you don't know what you need to do, we have a professional team of claims experts here ready to assist you. Alternatively, for more information, read the whole article below.

* Who sells guarantor loans and what are they? Guarantor loans are when a family member or friend agrees to act as your 'guarantor,' guaranteeing that you will make your payments if you are unable to. These loans are costly, with obscene APRs (we're not fans), typically exceeding 50%, and because repayments can last up to five years, customers can pay back more than three times what they borrowed due to the way interest accumulates. Amigo is by far the most well-known. Bamboo, George Banco, Buddy Loans, TrustTwo, and TFS Loans are among the others.

* What is a mis-sale? If you can't afford the loan, whether you're the borrower or the guarantor, that's a significant red flag. If you have been treated unfairly, you may be entitled to compensation. Our mis-selling checklists for borrowers and guarantors contain detailed information.

* How much do you have to pay back? In a nutshell, borrowers usually get all of their interest and costs returned, plus an additional 8% compensatory interest rate. Guarantors receive identical treatment, but you may also be reimbursed for any payments made on the borrower's behalf. If you're a borrower, see what you owe, and if you're a guarantor, see what you could collect back.

* Have you ever taken out an Amigo loan? Amigo's proposed 'scheme of arrangement,' which would have curtailed client payouts, was rejected by the High Court. Since then, Amigo has stated that it is considering all its alternatives, including a new scheme. All claims have been put on hold for the time being. You CAN still file a claim, albeit it's unclear how long it will take and how much you'll get.

What should I do if I'm an Amigo customer?

You can file for a claim using a claims firm like Ingram Toft or file on your own. Ingram Toft however, has a high success rate as they have professionals who writes strong and compelling cases.

Guarantor loans are costly; for every £100 borrowed, you may wind up paying £175 in interest.

Amigo Loans, which is the largest lender in the guarantor sector, is a good example. On a typical loan, it charges a 49.9% annual percentage rate (APR). This indicates that if you borrowed £5,000 and paid it back over three years, you'd owe £8,782.20. In other words, you repay £175 for every £100 borrowed.

So, while the APR is equivalent to certain high-interest credit cards, you won't be able to pay off the debt without paying interest because you'll be charged interest from the moment you take out the loan, which means you'll nearly always be paying more.

Guarantor loans have now surpassed PPI as the most widely criticized financial product.

According to the Financial Ombudsman Service (FOS), more than 10,000 new complaints about guarantor loans were received between October and December of last year, up from 303 new instances in the same quarter of 2019.

In 81 percent of the complaints the FOS has evaluated, the customer was determined to be correct. This is the greatest complaint success percentage of any category overseen by the ombudsman, surpassing even payday loans and PPI.

Are you the one who has taken out the loan (borrower)? You may be entitled to compensation if you were misled or treated unfairly.

Given the industry's numerous problems, you may be entitled to compensation if a lender mistreated you, such as by failing to put up a payment plan when you were in financial hardship. Let's look at when you might be eligible for a claim.

Were you duped into buying something? If you can't afford to repay the loan (since they presumably didn't verify if you could), that's a big red flag.

Before lending you money, lenders must verify that you can afford it. If you're having trouble repaying your guarantor loan or can't afford it, and you haven't had a big change in circumstances since taking it out, you may have been mis-sold.

A loan (and any further borrowing) is termed unaffordable if it places you in such a financial bind that you fall behind on expenses or need to borrow extra to keep up with repayments. It's as basic as that, which is why a lender will need to evaluate your income, savings, and previous loans.

This isn't just good practice; it's something the lender is required to do in order to comply with the Financial Conduct Authority's (FCA) standards.

Important: You can still make a reclaim if you have an outstanding loan or if you've already paid it off. While it's better to file a claim within six years of taking out the loan, it's not impossible if it takes longer. Customers who just discovered in the last three years that their lender should have verified affordability will be considered by the ombudsman, even if the allegation is from 2007.