Controversial lender Amigo will resume operations under a new brand

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After spending a year beset with complaints and legal battles, it is now looking to offer new loan products under a different brand, RewardRate, by February next year. Photo: Amigo

Subprime lender Amigo saw its shares rise on Tuesday after announcing plans to return to the market after a two-year hiatus.

The controversial lender previously had its reputation tarnished by claims it mis-sold loans. It suspended lending to guarantors in March 2020 to clear up a backlog of allegedly unaffordable loans.

After spending a year beset with complaints and legal battles, it is now looking to offer new loan products under a different brand, RewardRate, by February next year.

RewardRate will offer two loan products, a personal loan and a guarantor loan, offering cheaper credit to those who repay on time.

Borrowers will have the option to reduce their annual interest rate by up to 15 percentage points. Amigo plans to offer a personal loan that starts with an annual percentage rate of 49.9%, while the guarantor loan starts at 39.9%.

Both products will give borrowers the option to reduce the interest rate to 34.9% APR by making payments on time. They can also freeze a payment once a year, without incurring penalties.

However, this decision is subject to the approval of the financial watchdog, the Financial Conduct Authority (FCA).

The group is looking to raise funds in the next financial year to help it return money to creditors. Last month he also won High Court approval for a bailout which included compensation for former customers.

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The company said it “aims to provide more affordable, responsible and flexible financing to underserved consumers who currently have few borrowing options.”

“RewardRate also seeks to provide a pathway from higher cost financing to cheaper credit by allowing those who repay their loan on time to reduce their APR by up to 15 percentage points,” he said. he declares.

“In shaping the proposal, the new Amigo leadership team drew lessons from Amigo’s past to ensure that a compliant and accountable customer-centric culture is at the heart of the business, as well as a improved underwriting process with improved accessibility controls for customers.”

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