Wonga.com advert

[Over The Hill]

Advert on daytime TV yesterday lunchtime for loans of up to £1,000 until payday. Small print on the ad said the APR is 4214%

Now at that rate if you borrow £1,000 and did not pay the money back and interest was applied anually then in 2 years you owe them 1.77 million pounds!

To be fair it is not designed for long term loans and they say borrow £265 for 14 days costs £42 which perhaps is less than getting hit with overdraft charges.

 

[661-Pete]

http://www.thisismoney.co.uk/credit...le.html?in_article_id=487829&in_page_id=53937

My wife sometimes comes home from her stint at the CAB, very angry, saying that troubles with wonga.com make up a sizeable proportion of all the workload they have to deal with, helping out the clients with debt troubles. She would like to see the site taken down for good.

 

[oliglynn]

That's a whooping interest rate when expressed as an APR, but I'm sure lenders like these wouldn't provide short term loans at anything near the 8-10%APR you'd pay on a typical personal loan - as interest on that would only be a couple of £.

 

[dan_bo]

http://www.thisismon...n_page_id=53937

My wife sometimes comes home from her stint at the CAB, very angry, saying that troubles with wonga.com make up a sizeable proportion of all the workload they have to deal with, helping out the clients with debt troubles. She would like to see the site taken down for good.

But then blackpool FC would be without a sponsor!

 

[Black Sheep]

As has been said, it's intended as a payday advance,

for example if I needed to pay our £500 car insurance the week before my wages come into my bank account then I can take out a loan from Wonga to then pay back a week later.

they say themselves that 'short term loans are not intended as a long term borrowing solution' and they are quite up front with the costs from what I can see (the adverts and a very quick glance at their site during a similar debate to this one)

APR has to be calculated annually hence the huge APR

I don't want to tar everyone with the same brush, as I know some people may borrow based on being able to pay it back with the following weeks wages to find that the following week the company they work for has gone into receivership but I am lead to believe some people are borrowing in order to meet repayments of other loans or not reading the terms.

 

[Riverman]

If a business wants to offer loans with 1000% APRs etc, then at the very least the government should force them to pay for cleaning up the mess when people default on the loans. Including the cost of CAB having to deal with these cases.

 

[thomas]

http://www.thisismon...n_page_id=53937

My wife sometimes comes home from her stint at the CAB, very angry, saying that troubles with wonga.com make up a sizeable proportion of all the workload they have to deal with, helping out the clients with debt troubles. She would like to see the site taken down for good.

Your wife should be more annoyed at people who are misusing credit lines like this. These websites are all very up front with what they charge and how they should be used. The fees they charge are high, but if you need a bit of money for something before your pay comes in then they are suitable.

It's all about budgeting. I would prefer to use something like this, as a last resort, before pay day than pawning my items off.

 

[dan_bo]

Your wife should be more annoyed at people who are misusing credit lines like this. These websites are all very up front with what they charge and how they should be used. The fees they charge are high, but if you need a bit of money for something before your pay comes in then they are suitable.

It's all about budgeting. I would prefer to use something like this, as a last resort, before pay day than pawning my items off.

Never been chronically skint then?

 

[Howard]

Wonga.com - better than a loanshark.

 

[Bayerd]

Your wife should be more annoyed at people who are misusing credit lines like this. These websites are all very up front with what they charge and how they should be used. The fees they charge are high, but if you need a bit of money for something before your pay comes in then they are suitable.

It's all about budgeting. I would prefer to use something like this, as a last resort, before pay day than pawning my items off.

No she shouldn't, she should be more annoyed at the companies that prey on people that see their terms as the only way out (as we all should).

It's dead easy to say it's all about budgeting when you can nearly manage on what you've got. What about those that can't?

 

[thomas]

Never been chronically skint then?

Thankfully not, but doesn't make services like this less justified.

 

[661-Pete]

No she shouldn't, she should be more annoyed at the companies that prey on people that see their terms as the only way out (as we all should).

It's dead easy to say it's all about budgeting when you can nearly manage on what you've got. What about those that can't?

Thanks, Bayerd.

The best advice I can offer young Thomas, is that he go through the rigorous training to become an (unpaid) CAB adviser, himself, and see what it's like...

 

[MacB]

Thankfully not, but doesn't make services like this less justified.

Hmmm, I think you're being rather generous towards the likes of Wonga and you maybe need to understand that type of business and their business model in more detail. The ridiculous %ages are more a factor of being a lender of last resort than being a true reflection of risk. They don't actually put a lot on the line and, if there's a problem, their capital outlay can be quickly recouped. In fact they rely on people getting behind, sucker for life sort of thing. They'll have plenty on their books that are hooked by the spiralling interest. The capital will have long since been paid off several times over and all they are doing now is squeezing until something gives.

I take your points on the terms being clear and personal responsibility but I'm not sure you fully appreciate their target audience. This is cynically marketed directly at the most vulnerable in society. If you're good with that and business is business then that's fine, we won't agree but at least you're being honest. Personally I wouldn't be comfortable with exploitative practices of this type and despise the veneer of respectability they seem to have fostered.

 

[thomas]

While I am sure people get in over their head with services like this, and there should be a level of responsibility on the lender not to lend to people who are in these situations, wonga seem pretty up front with all the costs (much more so than overdrafts, etc). If people are so desperate for money that they use wonga with no chance of paying it off, they can probably find money from much worst sources or get it in my worst ways.

If I went into my overdraft I have no idea what it would cost me...however, Wonga have a nice and idiot free calculator on their homepage. They also have some nice, easy to find advice too.


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