Who are Wonga?

Wonga claim to be the leading UK Payday Lender, and have arranged over £1, 5 million’s worth of unsecured loans since 2007. They follow sound business practices, and are associated with impressive global investment partners too. Founder Errol Damelin believes his product fills a valued niche in the financial marketplace, and shrugs off criticism.

There’s been a lot of correspondence lately on the web about Payday Loans in general, and Wonga in particular. Some like Chris Skinner of the Financial Services Club expect the FSA to shut them down because they seem to flaunt the rules. But the bottom line is that Wonga has 1.5 million customers who prefer them to the banks, and we do live in a free country.

The Wonga Difference

Wonga started payday lending in the UK, and still steals a lead on its opposition with technology. Their website uses sliders that you drag to the amount of money you want to borrow, and for how long. We set ours at £200 over 20 days. The result was a loan cost of £46.04. Wonga didn’t indicate the interest rate at that point, which would have made comparisons a little harder if we were actually borrowing money. However, the page does show a representative APR of 4,214% – but this based on £207 borrowed over 20 days – so we guess the APR in our case is higher.

Wonga started out in the proverbial London basement, but has grown by leaps and bounds since then. That’s despite lots of competition starting up around them. In a way Wonga is the personality of its founder – passionate, rebellious and not about to be taken out. This means that Wonga is here to stay.

Founder Errol Damelin pulls no punches in an interview. As far as he’s concerned, he’s providing a service that 1.5 million people have already used – and one that was not available elsewhere when he started up. His argument goes this way: if you are facing eviction because you can’t pay the rent, how much is £50 interest when it bails you out until next payday?

The Flip Side

Some of Wonga’s 1.5 million customers are not that ecstatic. The bad press includes a note posted on the Consumer Action Group Website by an irate customer (yes, even Wonga has these). It appears the complainant got no mercy from the Wonga call centre when he failed to repay a loan. Three days later he owed another £40 for a black mark on his credit file, and the interest started stacking up.

We don’t know what happened afterwards, or enough about both sides of the argument either. So it’s not fair to pass judgement. It’s just a pity that it happened.

News Flash

There’s a new Payday Lender on the block called The Lending Well. They offer short term loans like the other providers, but with a difference – the money you borrow is from other people (not a faceless business). Why not contact The Lending Well today about your Payday Loan requirements. They’ll explain everything to you, and who knows – you could have that all important money in your account today.

We hope you enjoyed this article about Wonga…