Trust Two Guarantor Loans are provided by Everyday Lending Limited, a UK based private limited company, operating since 2006.
At the time of writing, Trust Two are no longer offering new loans, or further borrowing to existing customers, and are closing. Customers are still required to pay off any existing loans by their scheduled maturity date or earlier.
BUT - if you have had a guarantor loan with Trust Two, and believe you were mis-sold the loan, you can still complain and seek a refund.
A guarantor loan operates in the same way as any unsecured loan; money is borrowed from the lender, and repaid weekly, fortnightly or monthly. The difference is that a third party, or ‘guarantor’ is part of the contract. The guarantor “guarantees” to make the repayments if the borrower cannot. A guarantor can usually be a wife/husband, partner, family member or close friend or colleague – so essentially anyone who knows you and who you trust, and who is a homeowner. Typically, lenders send the loan amount straight to the guarantor (this is to allow for a cooling off period), who then, if they are certain they want to go ahead, send it on to the borrower. The borrower then becomes responsible for the repayments.
Trust Two refer to their (guarantor) loans as “Joined up Borrowing” – perhaps this is to get away from using the term guarantor in their headline marketing, as this type of loan has got a pretty poor reputation among borrowers in the lending marketplace. Trust Two’s eligibility criteria list is quite similar to most other guarantor lenders; however, they do not accept a spouse or partner as a guarantor – this may be because they require the guarantor to have separate finances to the borrower, which makes sense. Other requirements are that the guarantor is between 21-80 years old, has a good credit record/history, be a homeowner or have a mortgage, be a “suitable” tenant or be living with parents, and be able to make repayments if the borrower defaults. The borrower should be over 18, a UK resident, and have a “steady source” of income.
Anyone who has been rejected by more traditional or high street lenders due either to a bad or non-existent credit history, could well find that with a guarantor loan, they can acquire finance for general lifestyle or emergency expenses, as it is the guarantor’s credit rating/history that is considered, not theirs. People who are self-employed are a good example, as they may be unable to provide evidence of regular income, and inevitably will struggle to find a traditional lender to agree to lend, and this is where a guarantor can step in to help.
Lenders also promote the fact that having a guarantor loan could give the borrower the opportunity to improve or start to build their credit score and prove their financial trustworthiness if they can manage the account well. This should in turn mean that in the future, they can access loans with better (lower!) interest rates. Guarantor loans are seen as a better option to Payday loans, as borrowers still receive an instant cash injection, but they do not have to pay the ridiculously high interest rates over the relatively short (30 days) repayment terms.
Trust Two offered loans of between £1000 and £15,000, with repayment terms of between 1 and 5 years. The representative example that appeared on their website before they stopped lending was a representative APR of 37.9 (this of course is the best-case scenario and could go up), a loan of £5000, with a fixed interest rate of 32.57% over 36 months, and monthly repayments of £219.36. The total amount repayable would be £7,896.85, meaning the actual cost of the £5000 loan would be £2,896.85. Unusually, Trust Two did not promise money with a few minutes/hours of the loan being approved as most online lenders do; guarantors could instead expect the money within three days of approval.
Complaints to the FOS (Financial Ombudsman Service) about guarantor loans (not just Trust Two but other companies offering this type of loan) have increased by more than 3,000% in a year and are running at almost 800 a week. As so many complaints are being upheld, not just those investigated by the FOS but also those submitted by Claims Management Companies like Redbridge Finance, it is not surprising that several lending outfits such as Trust Two have stopped all lending and/or are preparing to close the business.
Complaints range from borrowers citing that the lender should never have given them a loan as they could not afford it, to family/friends claiming that they were pressured into agreeing to be a guarantor, or, worse, that they did not agree to be!
Claims Management Companies such as Redbridge Finance, are told by borrowers that Trust Two did not ensure that the loan was affordable, suggesting that they may not have conducted the correct affordability checks. If, during the application process the borrower did not mention all debts (either due to embarrassment, forgetfulness or similar), Trust Two should have checked their credit record anyway and noticed that the potential borrower would not be able to make the repayments without getting into more debt.
Trust Two have also been criticised for not exploring in enough detail a potential borrower’s stated monthly outgoings; most borrower’s will only be able to estimate at the time and could be likely to underestimate for various reasons – it is down to the lender to establish if these estimates are correct, and act accordingly.
Other complaints from borrowers include the fact that their financial circumstances have changed, especially with the COVID-19 situation, and the lender has not treated them fairly when they can no longer afford the repayments, and also, that if a payment failed, their guarantor was contacted too quickly.
Guarantors themselves have been coming forward with various complaints, many of them claiming that they did not realise that they would be liable for the payments if the borrower could not make them, and that they couldn’t afford them anyway!
Redbridge Finance has also found that Trust Two have perhaps tried to bypass or close complaints being investigated by communicating directly with the borrower and offering sums of between £150 to £500 in final settlement of the complaint, when typically, an investigation and eventual uphold of the complaint would have resulted in a much higher claim pay-out. So, if you have made a complaint, either by yourself or through a claims management company, seek advice before you accept an offer
If either the borrower or guarantor feel that Trust Two lent you money and you believe they did not undertake in-depth checks to check that you could afford the loan, then we can help by assessing your claim to see if you were mis-sold the service they offer. Or if you feel that you have been treated unfairly, for example if your financial circumstances have changed, and Trust Two have not tried to help you in any way, then please go to www.redbridgefinance.co.uk and register.
Our claims experts can take on your case and make a claim for a full refund of all the interest and charges that Trust Two has charged. If you want to make a complaint against Trust Two, the process is very straightforward. All you need to do is sign up on our site and let us know which lenders you want to make a claim against. We then assess the information you have provided and take your claim forward by making a complaint on your behalf. We deal with the responses from Trust Two and of course will keep you informed every step of the way.
If you have had problems repaying your loan or think you might have been mis-sold a loan, then you could be entitled to a refund. Contact us today by going to www.redbridgefinance.co.uk and signing up, and we can assess if you have a claim.