wonga.com - 2689% APR loans

Log in to reply
S

sellickbhoy

Free Member
Jun 5, 2009
1,062
258
  • #5
    oh, i'm quite impressed they make it so clear

    just seems wrong - morally.

    and i'm not even meaning the company are doing something amoral, it's just a sad reflection on the buy now, pay later society we are living in.

    pretty frightening stuff
     
    Upvote 0
    R

    Rasta Pickles

    Free Member
    Jun 15, 2010
    335
    71
    Bristol
  • #6
    sellickbhoy said:
    oh, i'm quite impressed they make it so clear

    just seems wrong - morally.

    and i'm not even meaning the company are doing something amoral, it's just a sad reflection on the buy now, pay later society we are living in.

    pretty frightening stuff
    Click to expand...

    Not in the least.

    If I need £400 to pay my mortgage to avoid being turfed out onto the streets knowing full well I'm due a cheque for £1k in two weeks, it's a no-brainer.

    They are *very* transparent and for that they should be commended.
     
    Upvote 0
    C

    crossdaz

  • #10
    bjg123 said:
    They're not loaning the money for a year though are they? They're providing short-term loans, if you need 50 quid for something a week before you get paid then they provide a reasonably priced service.
    Click to expand...

    Exactly right. The actual interest paid is a very small amount and the apr is misleading.
    Obviously the danger is that people don't do this as a one off and do it week in and week out - then it does get expensive!!

    Of course the reason why these businesses exist is that the holier than thou High Street banks will not make small cash loans at any price because they would have to be equally transparent and couldn't possibly compete.

    Those fancy buildings and advertising campaigns don't drop out of the sky ;)
     
    Upvote 0
    A

    Alex C.

    Free Member
    Jul 22, 2009
    110
    14
  • #13
    I haven't got the calculations at the moment but bank overdraft charges can be higher than that APR - it's a useless method of calculating short term interest rates (except, perhaps to compare with other similar services).

    It used to be the case that the payday loan companies had to consider the fees of a CHAPS transfer as well, but I think it's all faster payments now.
     
    Upvote 0

  • #14
    As has been pointed out, judging by APR is completely unreliable.

    The cost of a couple of 'bouncers' or unauthorised fees can far outweigh this APR. (The indirect cost of bouncing cheques is incalculable)

    How many buying decisions do you make on headline figure alone?
     
    Upvote 0
    1

    14A

  • #15
    Might I just add, I think by law they need to be 'transparent' and display the APR rating, I'm sure if they could they would hide that figure.

    As others have said, its based on a short period, no doubt someone will loan £100 and forget to pay it off though.
     
    Last edited by a moderator:
    Upvote 0
    B

    BigRedOne

    Free Member
    Jul 5, 2010
    21
    3
  • #16
    It might sound reasonable for the short period of time that you initially borrow the money for. But what happens if for some reason you cannot pay the loan back after that period? The amount borrowed is soon going to mount up. The sad fact is that the people who are likely to use such a service are also the same people who are going to find themselves in this position.
     
    Upvote 0
    D

    doherty_1980

  • #17
    But they are short term loans only like a pay day loan so the apr is completely irrelevant. The Wonga site seems to be down for maintenance but I just found another company charging 3198% APR. For a £200 loan for 9 days I would pay back a total of £223.40. Its a very cheap and quick way to borrow money if you ask me, I wouldnt lend money out for those low rates. In fact I wouldnt waste time chasing a measly £23 gross profit on anything that had a £200 outlay, let alone something as high risk as lending.

    Its not their fault if the people can't pay the loan back. Its time everyone started taking responsibility for their own actions.
     
    Upvote 0
    S

    solopreneur

  • #18
    garyk said:
    They shouldn't be allowed to set their rates that high, simple as. Sure they are taking on riskier debt so I wouldnt expect them to compete with typical loans and credit cards but that is loan shark territory, they shouldn't be commended at all, its a disgrace.
    Click to expand...

    It is not loan shark territory at all. Compare the total amount repayable, and it is quite fair for lending a few quid for a very short space of time.
     
    Upvote 0
    S

    solopreneur

  • #21
    garyk said:
    wow looks like some wonga affiliates/fan boys on this thread.
    Click to expand...

    I would like to state that I have no affiliation etc with any of these companies, I just think that you have misunderstood APR, or have not taken its limitations into account.

    If a mate asks you to borrow a tenner until this time next week, and you say "no probs, just buy me a pint when you repay me", calculate the APR that you have just charged him- I bet that it is far greater than these payday loans companies.

    If I could find the calculation, I would work it out...
     
    Upvote 0

  • #22
    solopreneur said:
    I would like to state that I have no affiliation etc with any of these companies, I just think that you have misunderstood APR, or have not taken its limitations into account.

    If a mate asks you to borrow a tenner until this time next week, and you say "no probs, just buy me a pint when you repay me", calculate the APR that you have just charged him- I bet that it is far greater than these payday loans companies.

    If I could find the calculation, I would work it out...
    Click to expand...

    Me neither - it just p*sses me off when people grab hold of a small piece off information and mmake big judgements.

    A little knowledge, as they say, is a dangerous thing...
     
    Upvote 0
    R

    Rasta Pickles

    Free Member
    Jun 15, 2010
    335
    71
    Bristol
  • #23
    harryboon said:
    The APR looks mad but in reality you are paying it on a small amount over a max of 30 days so its very like the banks charging you £20 every 5 days for using an overdraft :D
    Click to expand...

    Go back a few years when if you went overdrawn, by even 1p for 1 day, they charged you for every dd/standing order/cheque/cash withdrawal **over the previous three months**.
     
    Upvote 0
    Curtis

    Curtis

    Free Member
    Nov 30, 2008
    190
    26
    Manchester
  • #28
    Skimmed some of the replies so it's probably been said. Wonga is pretty upfront about everything and it's based around really small loans from what I can gather - max loan is £1k. Their site's title is "Short-term loans".

    I think they are perfectly fair with the APR though I think there has to be something which keeps control if somebody who borrowed something like £100 forgets - they might face a nasty surprise a few weeks later.
     
    Upvote 0
    S

    suprjparks

  • #30
    Many people are quick to say how bad these companies are. I guess the interest is justified (usually) for the borrowing period. They tend to spell out the damage to you as well so you know exactly how much you are paying back. I've used one before called payday power, ended up paying around £25 extra on what I borrowed, which didn't seem too bad. I bet you get a few dodgy companies out there though.
     
    Upvote 0
    Log in to reply

    Latest Articles

    Top Bottom
    Community
    Articles
    Menu