How Much Does A Wonga Loan Cost? Interest Rates & Hidden Charges
If you are wondering exactly how much a loan from Wonga is going to cost you then here we will give you the answer. We take a close look at Wonga interest rates, look at any hidden charges and also find out how much it will cost you if you don’t pay your loan back on time. For rate prices and interest information about Wonga, this page should tell you everything you need to know.
Wonga are a company that specialise in short term loans. They have come in for some negative press due to the extremely high APR they charge on loans. Another issue is what happens if you don’t pay the loan back on deadline day. So if you are considering taking out a loan with Wonga there are a few things you need to take into consideration. So first up, let’s talk interest.
Wonga Interest Rates
So as mentioned Wonga give out short term loans, they offer minimum hassle and state you should get your money within the hour. So how much interest will they charge you? Well it depends on a few things. First of all, obviously how much money you want to borrow and secondly how long you want to borrow it for. For a first loan with Wonga the maximum you can borrow is £400 and the longest term you can do this over is 34 days. Then Wonga will take one signal payment out of your bank account on the agreed date.
So as an example let’s say you want to borrow just £100 over 34 days, the interest you are charged would then be £40.88 making a total amount payable of £140.88. However, if you only need the money for let’s say 3 days, then the interest on £100 is only £8.62. So if you are just desperate for some money until your wage goes into your bank, then Wonga are not really a bad option at all. Things get a little more expensive however if you borrow more over the maximum term, £400 over 34 days will cost you £141.48 with total payable at £541.48, so as you can see the interest rates here are quite a bit higher.
The APR prices are quite shocking on these loans, it is set at a standard 4214%. But the fact is that although that is incredibly high it isn’t really a relevant figure as these are very short term loans. So if you pay your loan back to Wonga on time they can be quite a handy company to deal with, however, if you miss your payment then things can go badly wrong.
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Wonga state they will do everything they can to help you pay back your loan. But if the money is not in your bank on the day of collection, your bill will start to increase very rapidly. If they can’t collect your payment by 5pm on the agreed date then they will give you a £20 fine. Then on each subsequent day they will charge you extra interest. The longer this carries on the more interest they will charge and it will start to rack up quicker and quicker.
Wonga do not state how much interest they charge on missed payments, these could be seen as hidden price charges but no doubt they are in some small print somewhere. There are horror stories if you read reviews of Wonga, people who have borrowed £300 and not paid the money back for a few months, then been hit will bills close to £1000. The fact is that if you don’t keep your side of the bargain then Wonga are really going to hit you with extra interest rates. They state that they will only charge you interest for an additional 60 days after your payment date, then the debt will be sold on to another company.
The fact is that if you use Wonga in the way they are meant to be used, they do offer some pretty good value prices on short term loans. Although the APR is quite staggering, the interest is not really that bad if you borrow for a short term. The real problem comes when you miss your payment and then the interest rates really start to hurt you. If you are confident you will have the money to pay back Wonga on the agreed date then they can be a good solution to cash flow problems, if you are looking for a long term solution to money issues though this is a company to steer well clear of.
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