Wonga provide instant loans in cash – often referred to as Payday loans. These cash advances are a relatively new phenomenon – though they’ve been established in other countries for longer. They are not meant to replace normal finance, rather they are there to fill a gap when there is a short-term need for a reasonably small amount of money that you know you will be able to pay back within a few days or weeks.
Of course, the interest rate is high. Interest rates are worked out yearly for things like loans and credit cards. If you want to borrow money for a short amount of time, you have to expect that the lender will want to recover its administration costs, insure for bad debt, and make a little profit.
This means that if you borrow £100 from Wonga for 4 weeks, you could end up paying more than £34 in fees and interest* – but the fact is, you can’t normally take out a bank loan for such a small amount, or for such a short length of time. Consider that your bank may charge you £25 each time you go overdrawn, and Wonga’s offer doesn’t seem so bad. But give that an annual interest rate, and it’s over 4000% percent.
So the thing to do when considering borrowing from Wonga is to ask yourselves these questions:
- What do I need the money for?
- Do I have any way of getting it – for example, a bank overdraft?
- Am I absolutely sure I will be able to pay the loan back at the end of the loan period?
Wonga’s website is simple, asking how much cash you want to borrow, and how long for. New users can borrow up to £400* instantly, while those who have borrowed from Wonga before and have proved they can pay the loan back can ask to borrow up to £1000*.
You’ll see instantly how much interest and fees you’ll need to pay.
For new users, the application process takes about 6 minutes, and you could have your cash within 15 minutes. There are no forms to fill in, and you can apply to borrow money 24 hours a day, 7 days a week.
Finally, please note what Wonga themselves say about applying for a loan with them:
“We don’t want to keep you in debt. That may sound funny coming from any lender, but Wonga provides short term loans for a few days or weeks. We’ll only lend you money for up to a month and you are always free to make an early repayment and save money, with no hidden fees. Unlike some lenders, we won’t keep rolling your balance endlessly or encourage you to make minimum repayments. So please think very carefully before you apply, because we expect you to repay us when you promise to. “