[News] Wonga - on verge of collapse.

Goldstone1976 said:

Wonga and their ilk have a despicable business model that should, imo, be illegal.

That said, I’m always bemused by the glee that accompanies any legal company going bust. Wonga employ several hundred people - they’ll be out of work. Let’s all celebrate. Odd.

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sjamesb3466 said:

Whilst I understand what you are saying, anyone willing to work for Wonga has questionable morals themselves so I won't be losing any sleep over it.

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GOM said:

To put the counter argument, since so many on this thread seem really happy about a service company going bust and putting the staff/workers out of a job.

The use of APR for a loan of a week is totally misleading. APR is used a comparator for loans to compare over longer periods, i.e per year not a week.

Everything (well most things anyway) have a cost. A newspaper costs, a pint of beer costs and so too does money. In an example given above, I know not if they are genuine figures** the cost of borrowing £500 for a week was £25, a big APR, but the cost was simply £25 for the use of £500 for a week. Anybody hired any equipment from tool hire places etc ? Would anybody complain about being charged £25 for the use of a £500 piece of machinery for a week, or car hire a £15,000 car for £100 per day ? Probably not with such vehemence and outrage as I read when it concerns the hire of money.

We shouldn't focus on the headline APR for something it is not suitable for, instead of the real problems being when the loan is not repaid, which is not restricted to 'payday' loans, which anyone who doesn't keep up with their mortgage or any other loan will testify to.

** in fact I just looked on the Wonga site and this is on the front page

Representative example

Borrow £150 over 14 days
Interest rate 292% pa (fixed)
Total amount payable £166.80
Representative 1,509% APR

So THE COST, forgetting the APR being 1509%, the COST of using/renting/hiring/borrowing £150 for 2 weeks with Wonga is £16.80.

If you don't want to pay, or can't pay the cost then don't buy the product.

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Goldstone1976 said:

Or... it’s the only job they can get, given the location of most of their employees. I (and possibly you too) have the luxury of a decent amount of choice about who we’d work for. Others, in more deprived areas of the country, do not. For them, it’s often the choice between this job, and no job at all.

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GOM said:

To put the counter argument, since so many on this thread seem really happy about a service company going bust and putting the staff/workers out of a job.

The use of APR for a loan of a week is totally misleading. APR is used a comparator for loans to compare over longer periods, i.e per year not a week.

Everything (well most things anyway) have a cost. A newspaper costs, a pint of beer costs and so too does money. In an example given above, I know not if they are genuine figures** the cost of borrowing £500 for a week was £25, a big APR, but the cost was simply £25 for the use of £500 for a week. Anybody hired any equipment from tool hire places etc ? Would anybody complain about being charged £25 for the use of a £500 piece of machinery for a week, or car hire a £15,000 car for £100 per day ? Probably not with such vehemence and outrage as I read when it concerns the hire of money.

We shouldn't focus on the headline APR for something it is not suitable for, instead of the real problems being when the loan is not repaid, which is not restricted to 'payday' loans, which anyone who doesn't keep up with their mortgage or any other loan will testify to.

** in fact I just looked on the Wonga site and this is on the front page

Representative example

Borrow £150 over 14 days
Interest rate 292% pa (fixed)
Total amount payable £166.80
Representative 1,509% APR

So THE COST, forgetting the APR being 1509%, the COST of using/renting/hiring/borrowing £150 for 2 weeks with Wonga is £16.80.

If you don't want to pay, or can't pay the cost then don't buy the product.

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seagullsslimjim said:

I may lend them a grand at 1,450% APR !

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sjamesb3466 said:

Problem is that the people getting a loan often can't pay the cost and can't get credit elsewhere (often for good reason). These companies pray on the stupid and the desperate who may not think they have another option. It's the companies responsibility to lend responsibly and Wonga have failed to protect people that need protecting from themselves.

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Goldstone1976 said:

Wonga and their ilk have a despicable business model that should, imo, be illegal.

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That said, I’m always bemused by the glee that accompanies any legal company going bust. Wonga employ several hundred people - they’ll be out of work. Let’s all celebrate. Odd.

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Bob'n'weave said:

I don't want to see anyone put out of a job but I am not sad to see this lot go under. Yes, the example from their site shows a reasonable interest rate over 14 days for £150, but it's still aimed at people who are the most likely to get into trouble with any repayments which is when the compound interest starts to rack up. Bearing in mind it was not that long ago that we were watching Panorama/Watchdog expose's on high interest loan sharks, and now they are all over the TV like they are giving it away for nothing.

Don't even start me on Top Cat getting a mortgage!

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GOM said:

Anybody hired any equipment from tool hire places etc ? Would anybody complain about being charged £25 for the use of a £500 piece of machinery for a week, or car hire a £15,000 car for £100 per day ?

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