Wonga

[beorhthelm]

Borrow £500 for a year and you'll pay £23.5k in interest !

but this doesnt happen. they cap the interest after a fixed amount. the APR is a misnomer because they legally have to display it like that, in reality its a fixed fee repayment.

much was made of admission yesturday that 40k people failed to repay. however, thats from 1.2m customers, and represents 3%. i wonder how many fail to repay credit card and bank overdrafts? and 1.2m suggests a large demand as stated above, and these companies arent lending to people with no prospect to pay back. its not even new, cash converters have been around doing the same for decades, not to mention pawn brokers.

 

[Czechmate]

These companies just seem to appear a few years back , they must of gone through a financial authority like the FSA , so they have allowed this to happen without really thinking of the consequences and should of put more thought into it , mind you this is the authority that couldn't even see the banking crises happening

 

[Eksman]

I made a big mistake off using wonga about 3 years ago, I had an app on my phone and was able to get cash within about 5 minutes which is so dangerous, back then was my time of going out to the pub with mates every weekend and if we decided to go into Brighton and I didn't have enough money, fine I would borrow 50 quid off wonga, nice and easy!!

But after a while that 50 turned into 100 the month after as I paid it off but then was short for the month and so on, then I reached £600 which was madness, my girlfriend then found out and gave me some advice (STOP using them YOU IDIOT), then after 2 months I paid them off... I urge anyone to NEVER use these companies as I never will again.... I was screwed for months because of one night out.

 

[TheJasperCo]

Peer-to-peer lending sites like One Circle and Zopa are definitely worth checking out. Whether you want to borrow or (like me) grow your savings, the rates are a lot better than payday lenders and even the majority of banks. It's what I use to save much of my money over the long-run.

 

[HawkTheSeagull]

I cant understand why ANYONE would use them if you arent 100% certain you will get the money back to repay. The way the loan companies check records is a joke though and it badly needs sorting as you can easily lie.

MOST people who use these companies use them with absolutely no problems at all - but unfortunately the media doesnt seem to care about them, they simply focus on the people who default on their repayment - the bias by the media at times can be a joke, even on Newsnight the other night, the woman interviewing the Wonga CEO clearly had a bias against the company and wouldnt let the CEO get a word in edge ways.

 

[El Presidente]

I was screwed for months because of one night out.

Well as least you got laid.

 

[Albumen]

Rather than banning them advertising the government should put a cap on interest that can be charged for credit. Obviously it would kill most of the payday loan industry overnight though.

YEs, unfortunately Cameron has a healthy chunk of Wonga shares so they're not going to disappear soon. One Big Society.

 

[hybrid_x]

Many people moaning about Wonga do the following; borrow 100k and pay back over 200k, but as it's called a mortgage they think it's ok.

 

[kingcole]

Borrow a tenner off a mate for the week until payday.

At the end of the week, buy him a pint (£3.50) when you pay him back to thank him for his trouble.

Not sure how to work out the APR, but it's 35% for the week. Compounded the APR must be 5 figures!

 

[dougdeep]

Many people moaning about Wonga do the following; borrow 100k and pay back over 200k, but as it's called a mortgage they think it's ok.

But with a loan you don't end up owning a house.

 

[Sussex on Leith]

This is doing the rounds today - a funny but terrifying demonstration of how much you could theoretically end up owing at the same interest rates that Wonga charge:

http://toys.usvsth3m.com/wronga/

 

[fat old seagull]

I can't really come to terms with businesses that make huge profits off the back of unfortunate people. Even if it does occasionally benefit those in need of short term financial respite. Stricter lending rules and limited interest rates seems a good idea.

 

[Westdene Seagull]

Many people moaning about Wonga do the following; borrow 100k and pay back over 200k, but as it's called a mortgage they think it's ok.

Hardly the same though is it ? I assume you've brought your home outright with cash ? You of course wouldn't dream of renting as all that does is put money in the pocket of the corrupt capitalist profit making pig landlord !

 

[Albumen]

Many people moaning about Wonga do the following; borrow 100k and pay back over 200k, but as it's called a mortgage they think it's ok.

Mmmm

That's 80-100K over 25 years. And over the 25 years you will hopefully gain equity in the house.

Take the same mortgage out with Wonga at 1% a day and it will cost you
£268,049,124,349,723,000,000,000,000,000,000,000,000,000,000

So it's not really the same is it.

 

[fat old seagull]

Mmmm

That's 80-100K over 25 years. And over the 25 years you will hopefully gain equity in the house.

Take the same mortgage out with Wonga at 1% a day and it will cost you
£268,049,124,349,723,000,000,000,000,000,000,000,000,000,000

So it's not really the same is it.

I'd have to agree, it's not at all similar. Do you get any give always with the "Wonga Deal" though. Free pen or such like?

 

[Arthur]

This is doing the rounds today - a funny but terrifying demonstration of how much you could theoretically end up owing at the same interest rates that Wonga charge:

http://toys.usvsth3m.com/wronga/

But that is bollocks. Interest is capped after 60 days.

I'm slightly biased as I do allot of work for many of the pay day loan companies. They really aren't the horror merchants people paint them to be and when used how they are intended to be used provide a very useful service to many people (in Wonga's case 1.25m people last year). 97% of their customers pay their loans back in full and on time. Sure enough that does mean in the case of wonga you end up with about 40k people who default but if you are using a pay day loan company then I would guess you've exhausted every other avenue of borrowing money. The chances that person won't ever be able to repay that money and are likely to go bankrupt. Therefore it's really not in Wonga's interest for people to default on their loans.

I'm sure their qualifying criteria could be made stricter but in the same breath individuals need to take some responsibility for their actions. No one is putting a gun to anyone's head and saying take a loan out.

 

[Westdene Seagull]

YEs, unfortunately Cameron has a healthy chunk of Wonga shares so they're not going to disappear soon. One Big Society.

Oh dear - political dogma introduced to the thread ! Wonga is a limited company not a PLC and all the shares are owned by the founders or private equity companies. The Tory government has a lot to answer for but left wing lies don't help the situation at all.

 

[Guy Fawkes]

Mmmm

That's 80-100K over 25 years. And over the 25 years you will hopefully gain equity in the house.

Take the same mortgage out with Wonga at 1% a day and it will cost you
£268,049,124,349,723,000,000,000,000,000,000,000,000,000,000

So it's not really the same is it.

So what if you take out a mortgage (paying all the fees that go with it) and then have to sell a couple of months later? (again plus all the fees, etc) - I assume you will end up a lot worse off than before

 

[Guy Fawkes]

I imagine the high interest figure they quote is their way of getting people to pay back any loans quickly.

If they charged only 20 to 30% interest per annum, how many would decide not to repay or not at least straight away and probably spend that money on luxuries / nights out, etc, or whatever instead? - Are the people borrowing likely to be people who woulld normally look to repay on time or early without this huge interest rate acting as an incentive?

 

[Guy Fawkes]

It makes me laugh that a few years ago store cards were in the spotlight for charging around 26% interest pa. - How times have changed

Maybe the issue isn't the existance of these companies and their methods, but the fact that so many have been kinda forced down this route in order to make ends meet. Maybe more money needs to go back into the lower earners pockets to help them out or maybe there needs to be a shift in attitudes away from luxury items being seen as every day necessities and the realisation that we can't all own the latest phones / game consoles, have sky tv etc....