New loan service. A measly Typical 2689% APR.

britboy4321 · 22 May 2010 at 11:04

I almost lol'd when I found these cheeky chappies

WONGA.com is offering loans for a measly 2689% interest. BARGAIN! http://www.wonga.com/money/faq/

I somehow don't think I'll be using this lot. And anyone that does, I'd suggest, maybe, a frontal labotomy?

The thing is, I bet there's some numpties out there that actually use them, and it turns wonga.com into a successful business

I read somewhere that 4/10 of the British population do not understand percentage rates

Strife212 · 22 May 2010 at 11:06

Not this again, you're meant to pay it back like 2 days later.

Theguy · 22 May 2010 at 11:06

I would have a punt in the dark and say its a very short term loan service? - very bad idea using it like a proper loan though. but thats why the interest rates are so high..

[FnG]magnolia · 22 May 2010 at 11:07

britboy4321 said:
I read somewhere that 4/10 of the British population do not understand percentage rates

Yeah, it was 33%.

VaderDSL · 22 May 2010 at 11:08

[FnG]magnolia;16602240 said:
Yeah, it was 33%.

Wasn't it 4/5?

britboy4321 · 22 May 2010 at 11:11

Very bad idea using it for anything. Borrowing £100 for 5 DAYS gives you £10.70 interest.

Go just about anywhere else, borrowing £100 FOR A YEAR and you're maybe talking £8.50 interest. for a year.

What kind of muppets use these places? They say all over their site they still do credit checks, so its not like they're aiming for 'Joe Loser'. They're after you and me!

Cosimo · 22 May 2010 at 11:11

britboy4321 said:
The thing is, I bet there's some numpties out there that actually use them, and it turns wonga.com into a successful business

Not numpties just poor people:

http://www.which.co.uk/news/2010/01/poorest-families-carry-82m-loan-shark-debts--195207

Illusion · 22 May 2010 at 11:33

Surely the kind of people that use these services are the ones that get themselves in such a financial mess that they have no choice?

Quite surprised that they do credit checks though..

lord filbuster · 22 May 2010 at 11:35

britboy4321 said:
Very bad idea using it for anything. Borrowing £100 for 5 DAYS gives you £10.70 interest.

Go just about anywhere else, borrowing £100 FOR A YEAR and you're maybe talking £8.50 interest. for a year.

What kind of muppets use these places? They say all over their site they still do credit checks, so its not like they're aiming for 'Joe Loser'. They're after you and me!

I don't think there are many places that would offer you £100 at 8%. In fact, most of the larger banks don't go below about a grand. Yes, they probably are a bad idea, but if you really really need a small loan, i don't think you have much choice.

Mr^B · 22 May 2010 at 11:37

britboy4321 said:
Very bad idea using it for anything. Borrowing £100 for 5 DAYS gives you £10.70 interest.

Go just about anywhere else, borrowing £100 FOR A YEAR and you're maybe talking £8.50 interest. for a year.

What kind of muppets use these places? They say all over their site they still do credit checks, so its not like they're aiming for 'Joe Loser'. They're after you and me!

You'll often find that there's a minimum amount and minimum term for a "normally" priced high street bank loan:

"Sorry. The minimum you can borrow is £1,000." from NatWest for example. So even if you only need £100, you have to borrow £1,000 then if you want to pay it back early, you have to pay the early repayment charge and so on.

All of which will take the cost to probably the same as the £100 for a week costing you £10.

D18241 · 22 May 2010 at 12:00

Wonders if people had a bad credit history if they could make it look better by using these guys by taking out a small loan and paying it back within a week

[TW]Fox · 22 May 2010 at 12:08

Not this again. With short term low value loans Apr is irrelevant and all that matters is cost of borrowing.

Berserker · 22 May 2010 at 12:16

britboy4321 said:
I almost lol'd when I found these cheeky chappies

WONGA.com is offering loans for a measly 2689% interest. BARGAIN! http://www.wonga.com/money/faq/

Ah, the delights of payday loan companies.

britboy4321 said:
I read somewhere that 4/10 of the British population do not understand percentage rates

I'll wager that if you asked the same question about APR, a fair majority of the population wouldn't understand.

britboy4321 said:
What kind of muppets use these places? They say all over their site they still do credit checks, so its not like they're aiming for 'Joe Loser'. They're after you and me!

The kind of 'muppets' who can't get an overdraft, perhaps? Their idea of a credit check almost certainly doesn't bear any relationship to what you'd get if you went to a regular bank.

lord filbuster said:
I don't think there are many places that would offer you £100 at 8%. In fact, most of the larger banks don't go below about a grand.

This. They also jack up the interest rate for smaller loans because obviously smaller loans cost just as much to administer but wouldn't otherwise make much back in interest.

D18241 said:
Wonders if people had a bad credit history if they could make it look better by using these guys by taking out a small loan and paying it back within a week

I'd be more worried about a person's ability to manage money if they were a regular user of payday loans. Credit scoring is automated so it probably doesn't work like that in practice, however.

Simian · 22 May 2010 at 13:04

There's another one out there with the same APR and the shocker to me was looking through the Terms and conditions, and found the minimum age to be 10 YEARS OLD!!!...

WTF!!.. :confused:

britboy4321 · 22 May 2010 at 13:05

Simian said:
There's another one out there with the same APR and the shocker to me was looking through the Terms and conditions, and found the minimum age to be 10 YEARS OLD!!!...

WTF!!..

Loan sharks do as booming business in times of economic woe

And these people are hardly the most honourable of folk

They'll get money from where ever they can

meghatronic · 22 May 2010 at 13:36

So....?

britboy4321 · 22 May 2010 at 13:39

meghatronic said:
So....?

So .. er .. don't take out a loan without knowing the APR??

TBH thought you'd have known that. Oh well, you do now.

meghatronic · 22 May 2010 at 13:46

britboy4321 said:
So .. er .. don't take out a loan without knowing the APR??

TBH thought you'd have known that. Oh well, you do now.

Supply... demand. Simple economics.

I don't particulary agree with it, but it's moot and they are kosher.

Stupid people are given too many cop outs as it is (IVAs etc). Note, I'm not saying people that need financial help are stupid.

We have no interest (no pun intended) in keeping you in debt. Now that may sound like a strange statement for any lender to make, but Wonga provides very short term loans of between one day and a month. We want you to repay your loan quickly and, unlike traditional sources of credit, we're not about stringing repayments out for as long as possible or hitting you with nasty charges. Our service is designed to put you in control of your cash flow, for those times when an unexpected expense catches you by surprise.

Moredhel · 22 May 2010 at 14:04

britboy4321 said:
Loan sharks do as booming business in times of economic woe

And these people are hardly the most honourable of folk They'll get money from where ever they can

My understanding is that this would be unenforceable, as people under 18 are judged as being unable to enter into such contracts concentually.

daz · 22 May 2010 at 14:06

It's great that so many on OcUK are in control of their finances and always have money saved up for a rainy day.

Unfortunately, it's not the case for everyone out there and even the smallest unexpected expenses can throw someone at the lower end of the earning spectrum's budget out the window. If the car you use every day to get to work breaks down and needs some work doing for ~£200 it might mean that the person can't afford their rent that month or they can't afford their council tax. I can definitely see these types of payday loans having their uses as long as they're used in the correct way (very short term loan to paper over cash flow issues).