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Rogers Rants - Part 7
Danger of Guarantor loans and Log book loans
Our work on Payday loans last year was very successful but one product that may be used as an alternative to payday lending is guarantor loans.
Guarantor loans are taken out with the security that a family member or friend will pay off the loan if the borrower is unable to make repayments. The loans are deliberately targeted at high-risk consumers as an ‘old fashioned’ form of borrowing based on relationships and trust. If the person taking out the loan defaults on the payment then the guarantor is liable to pay that debt.
In the office we have started to see people who clearly did not understand that this was going to be the case and not only is this causing financial hardship but it is also affecting family relationships.
We have also this week seen a client who secure a small loan against his car, a so called “log book loan” he missed a couple of payments and his car has now been taken to sell to clear the debt.
This lending is to typically vulnerable and uninformed people and Citizens Advice are campaigning for tighter regulation and better information for borrowers so that they don’t get any nasty surprises.
If you have been affected or are struggling please come and get free help before it’s too late. See our front page for how to get help