About guarantor role?

[OriginallyfromLA]

This is very outing, but oh well, I really need advice!

I have a mental illness that was diagnosed a couple of years ago. In the year or so preceding this I exhibited chaotic, wild, behaviour and poor decision making. In this period of time I took out a high interest loan which my sister agreed to be guarantor for. She materially benefited from this stupid loan.

She willingly agreed to be guarantor, knew exactly what the circumstances would be and how it all worked.

I have never missed or defaulted on payments. There has never been any sort of inconvenience to her. Not once. She has never been contacted by them or hassled or anything like that. You can see where this is going.......

Today she has messaged me out of the blue, saying that she wants me to swap the guarantor role to my dp (not together when I originally took the loan out). She says not only is it a constant worry that she wants to get rid of, but she can't get a loan or mortgage whilst she remains as G.

For reasons I won't go into my dp won't pass the credit check so this isn't an option. He also doesn't know about the loan because I'm embarrassed to have done such a stupid thing and I really don't want to tell him.

For context: she isn't a high earner and I have gone above and beyond to treat her whenever possible, include her in family meals and outings. I pay her to house sit and dog mind. She works full time and recently told me that she was thinking about getting a second job to help make ends meet because she is "so sick of being poor". I was really concerned about this (she is single and lives alone so no support) so I mentioned it to our (wealthy) father, who thanked me and arranged to transfer her a couple of extra hundred pounds per month to help out. I told her I had done this and she hit the roof, saying her finances were her issue and she didn't want any interference. Fair enough, but I was a bit hurt and upset as I just wanted to help.

I've replied to her message saying that dp as G isn't an option and saying I'm sorry she feels it's a constant worry but there haven't been any problems.

I feel bad that it's bothering her but she knew what the deal was when she signed and telling me it's all too much now and she'd like to pull out seems unreasonable to me. I don't think I can get her out of it, if I could do a swap then I would, but there literally isn't anyone else. I asked my dad at the time and he said no - fair enough.

She hasn't replied to my message so I think she's annoyed. She's very likely to see this situation as a bad decision on my part that she got dragged into. Whereas actually, she made a conscious decision to help me out.

AIBU to think this and therefore tell her? Or am I being a CF????

A contract is a contract.

You wouldn’t just be able to decide you didn’t want your loan anymore so it should be the same for her.

I'd not do it! My brother asked me to be guarantor for his rental house. I said no...I have a triple A credit rating and his is shit! No way was I risking that...caused a huge row, but once you're on the loan as guarantor you cannot be released. And unlike a 'simple' loan that has an end date, a rental is indefinite. I could potentially have been tied in forever!! My mum called me heartless (she's 80 and has no money so couldn't do it herself, and has no understanding of the implications). I stood firm 🤷‍♀️

Definitely try and have her released. Speak to your dad and see if he would do it now that you've been in a better head space and have been making your payments and explain that your sister is struggling to get a mortgage because of it.

But at the end of the day if you try every avenue and can't get someone else to do it, what else can you do, really? As you said she knew what she was getting herself into and still agreed.

My dad won't help. He's had a lot of expense from my siblings and he's given me a lot of money in the past.

The loan is a guarantor loan. Amigo to be precise. You can't have one unless you have a G and it's paid into your G's account. The G has a pivotal role.

I told my dad about my concerns for her out of worry. I didn't give any details, just repeated what she'd said to me. And my mother told me that she's been sending my sister money for food - that's how worrying it was and why I spoke up.

I get that in an ideal world I could just release her from the obligation but that just isn't possible. She isn't applying for a mortgage and won't be any time soon!

I don't know of any other ways to deal with this loan - are there any????

Ah, just seen the latest two replies! That would be a no then.

I think the only thing I can do now is to concentrate on paying it off. I already have a small lump sum I can put towards it and I'll make it a priority after basic bills.

I actually don't know how long I'll be making payments for. Years, definitely. After this is over I will NEVER be getting into debt again.

Ok, so it isnt easy to release.

Are there any???? Yes, as has been said. Pay every spare bit of monrey you have in and get it paid off.

And it seems your dad has got wise to all of you.

Why not look into you and partner getting a new loan to pay this one off?

There has never been any sort of inconvenience to her. Not once
and
She says not only is it a constant worry that she wants to get rid of, but she can't get a loan or mortgage whilst she remains as G.

It is an inconvenience to her. If you can't see that when writing the second statement then you need to.
You should be thanking her for helping when you needed it; it was exceedingly kind of her, and doing your best to free her.
Anything else is definitely a CF.

I think you need some financial advice. You might be able to transfer it to a lower interest loan. In any case, if you have a high interest loan you need to pay it off asap. Not be keeping lump sums aside or buying treats for your sister or meals out or holidays or having pets or any other luxuries. No wonder your sister is annoyed, she is desperate for you to pay off your loan and she can see you wasting money all the time. The fact that you don't even know how long it will take to pay off is a big concern. You need to work this out then at least you can tell your sister
It's the absolute least you can do. You seem to regard this loan as completely outside your control but it isn't.

I actually don't know how long I'll be making payments for. Years, definitely.

I can see why your sister is aggreived, that's going to be a massive millstone round her neck.

I get that in an ideal world I could just release her from the obligation but that just isn't possible. She isn't applying for a mortgage and won't be any time soon! you sound really entitled also.

Hi OP I have an amigo loan and wish I didn't! My dad is the guarantor so I pay it every month. I have 2 years left on it.
You should be able to log into your account online and check how much you still have to pay. Or give them a call. They re normally about 5 years.
Maybe you can get a bank loan now to pay it off and just pay the bank monthly?
Your sister s involvement is unfortunate but she did agree to be guarantor and would have been told at length how this would affect her.
I have MH problems too (bipolar) and got into a lot of debt when manic and working 3 jobs. The loan was to sort the debt out so I understand how it can happen.
Maybe call amigo with your sister there so she knows you are doing whatever you can to get her out of it.

I actually don't know how long I'll be making payments for. Years, definitely. You need to find out how long you'll be making payments on this - it isn't acceptable to say you don't know.

You need to have:

• a plan to repay this debt within a specific period,
• it needs to be realistic and affordable,

and then you can be very precise and reassuring for your sister about exactly how long it will take to free her of this worry.

It's no wonder she's concerned when you have this history and you're concealing this debt from your partner.

I've just googled Amigo loans, 49.9% APR borders on extortion! And I have no idea why anyone would ever agree to be a guarantor , you get the shittest of both worlds.

I think the only thing I can do now is to concentrate on paying it off. I already have a small lump sum I can put towards it and I'll make it a priority after basic bills.
I would have expected you to do this from the first. Not do it begrudgingly when pulled up. Your poor dsis.

I do understand that it's a millstone round her neck and she wants it gone. I hadn't realised how much it was affecting her. But, like others have said, she 100% knew what she was getting into and did so willingly. I am certainly going to look at other loans, prioritise paying it off over everything else and seeing if I have anything of high value to sell. Maybe a kidney 😂

Ruby - snap! Bipolar too.

Witch - it's not begrudging at all. I'm simply surprised by her level of feeling about this because she's never said anything before. Because the payments were being made with no problem and there were no issues I quite reasonably assumed that everything was fine. Now she's told me how she feels I can work on fixing it.

OP if your parents are having to help out your sister with money for food, it doesn’t sound like she would be able to afford the payments if they came after her. Would she ever have been able to afford them? It sounds like this is having an impact on her own mental health and I can see why. The loan may have been missold if affordability checks were not made. And if she wouldn’t be able to afford the payments now (and you can) it seems extremely unreasonable for Amigo to insist that she remains a guarantor. Does she have her own house ie is the loan secured, because from what you say it doesn’t sound like she does?

It might be worthwhile speaking to citizens advice. Some branches have advisors who are trained in debt and mental health.

it's not begrudging at all. I'm simply surprised by her level of feeling about this because she's never said anything before. it sounds like you wouldn't have done anything if she hadn't said anything.

How much was the loan?
I do have sympathy for your sister here tbh.

50 pct APR!!! That boggles the mind, forgot the guarantor dilemma, pay back the bloody loan. Or switch to some other form of financing because that interest rate is just ridiculous

OP, I think you're getting an unfairly hard time here. Your sister knew what she was doing and for how long when she agreed to guarantee the loan. If she had concerns, she could have said so then. If she needed you to be paying the loan back more quickly than agreed, she also could have told you that. Otherwise, it's entirely up to you to have been making the repayments according to the original schedule, and then doing whatever you chose with the rest of your money such as saving it.

At this point, now you know she wants out if possible you can start to explore other options. But I really think it's weird that people are suggesting you should have been doing that before.

Anyway. Things you can do:

1. Start paying back the loan more quickly, using your savings and increased payments.
2. Get some debt management advice - you might have a higher credit rating now that you've been paying off this loan for 2 years, and you might be able to get e.g. a 0% interest credit card to transfer some of the balance to.
3. Talk to the lenders about the process for switching guarantors (there must be one, for cases where a guarantor dies or is no longer eligible to act as guarantor), and see whether it's possible for e.g. your mother or father to step into the role.

And to the pp who said that the guarantor couldn't materially benefit from the loan, of course they could. Not financially but in other ways. E.g. if the loan was used for a car, and the OP then gave lifts to her sister, she would have benefited from it.

it sounds like you wouldn't have done anything if she hadn't said anything.

But why should she? As far as OP knew, the situation hadn't changed from when the sister agreed to act as guarantor.

How much loan are you repaying?

It is unacceptable to tie her into this for years. You need to release her.