The personal loan starts at 49.9% APR while the collateral product starts at 39.9% APR, with both products offering the borrower the option to reduce the interest rate applied over time to the equivalent 34.9% APR by making payments on time. Customers can also freeze a payment once a year, without penalty.
These products will be marketed under the RewardRate brand – no new lending will take place under the Amigo brand. The Amigo name will continue under a regulated lending entity, Amigo Loans Ltd, as well as the listed holding company Amigo Holdings PLC.
However, no pre-March 2020 loan products will be sold again as the legacy book continues to run out.
Amigo suspended lending in March 2020 and subsequently agreed with the Financial Conduct Authority (FCA) not to lend again without regulatory approval. Two years later, the regulator outlined its position by saying it could return to lending provided it met a list of conditions.
Firstly that his new business plan is sanctioned by the high court and that the FCA is happy with the plan. The company must also comply with certain conditions set by the FCA, the results tests of the company’s new loan system must have been completed to the satisfaction of the FCA, and that it is processing – to the satisfaction of the FCA – any other problem that may arise. .
Following the sanction of the new corporate scheme – which took place on May 26, 2022 – Amigo has met the first FCA condition and continues to engage constructively with the FCA to satisfy it on the remaining stages.
Under the new scheme, Amigo has agreed to a £35m cap on new business loans before the proposed capital raise ends. The planned £35m of new loans are funded from internal resources.
Commenting on the news, Amigo Loans Managing Director Gary Jennison said: “RewardRate was designed to support the financial mobility of the millions of people in our society who have too few borrowing options.
“It was created by a new team, in collaboration with external partners, with the aim of incentivizing and rewarding timely payments and thus directing people towards a better credit score and towards traditional banking services.
“RewardRate is backed by a company that has undergone a profound cultural change under new management and once we have FCA approval we believe it will be an important new addition to the award market. means.”
Amigo will resume lending under its new RewardRate brand on February 26, 2023, with the company successfully completing a funding round by May 26, 2023.