Guarantor Loan Compensation

During your application process, you may not have mentioned all of your debts and if this didn’t match with your credit record, the lender should have ensured to reaffirm this.

It is possible that you underestimated your monthly expenditure due to guesswork or eagerness to be eligible for your loan and in such circumstances, if your figures appeared too low, your lender should have explored their reliability further.
At the time of your application did you have a regular income? If you were self-employed during this period or even had overtime that fluctuated, the lender should have looked at this.

Did you have evidence of recent applications for credit or previous problems on your credit record? Guarantor loans are specifically targeted at those with bad credit scores. However, the lender should have been conscious of whether your situation appeared to be worsening.

Whenever you topped up an existing loan, your lender should have run another set of checks concerning whether this was affordable. Had you missed any previous loan repayments? Had your finances deteriorated since your first loan? If so, the lender should have addressed the fact that their current loan could be unaffordable and as a result, capped any more lending.
The firm may only have carried out a brief affordability check on you because of your guarantor’s circumstance. Regardless of your guarantor’s financial status, the loan needed to reflect your personal repayment potential.

The first thing to consider when reviewing the eligibility for a guarantor loan complaint is whether a loan was affordable before it was given to you.

In short, the appropriate definition of affordable is whether or not after repaying it in installments, on time, you have money left over to pay your bills to avoid further lending.

To summarise, if you had to borrow more money or became behind with bills as a result of your guarantor loan repayments, you have grounds to make an affordability complaint. This route is available regardless of whether you are still paying the loan, have stopped paying the loan and are relying on your guarantor or even if the loan has been repaid.

If your affordability complaint is successful there are three potential outcomes. Should you still owe money, your interest is removed and you simply repay back what you borrowed. If your loan has now been repaid you will receive a refund of the interest in addition to 8% of the amount of your statutory interest. If you still owe money but the compensation is more than the amount owed, your balance will be reduced to zero and you will receive the surplus as a cash payment.

We work on a ‘no-win, no-fee’ basis. We charge 36% (30% + VAT) on any successful claims of the total refund received from your lender. If you cancel our service without our agreement after 14 days and after we submit your claim you will be liable to pay our full success fee should your claim be successful. You do not need to use our services to make a claim against your lender(s). It’s free to claim compensation from financial companies if you have lost money from a mis-sold financial product. You can do this yourself directly with the lender(s) and even if they reject your claim you can still take this to the Financial Ombudsman Service at http://www.financial-ombudsman.org.uk. If you aren’t sure how to make the claim, you can get free, impartial advice from consumer organisations.