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Short Term Payday Loans From Wonga - Wonga Reviews & Rates

Updated on September 16, 2011

On this page we take a closer look at the online short term loan provider Wonga. We will look at reviews of Wonga, find out all about their payday loans, look at Wonga interest rates and basically see how much the company are going to charge you for a payday loan. The idea of this page is to give you a one stop guide to Wonga and then you can make an informed decision whether borrowing from them is indeed for you.

In recent years there has been a big increase in companies offering short term loans also known as payday loans. The idea is to loan people cash just to tide them over for a short period of time until they can pay back the money. One of these such companies is Wonga. So first of all, let’s find out exactly what Wonga has to offer.

The Purpose Of Wonga

So how does Wonga work. Well as mentioned earlier, this is an online finance company so obviously you acquire money from them over the internet. They state that they over short term loans from £1-£1000, they say you will get a decision within a few minutes and the money will be transferred into your bank account within the hour. There are no forms to fill in and send off, nothing to fax, you don’t even need to actually talk to a physical person. This whole concept is designed to be quick and simple.

Despite Wonga seeming like a very good idea, they as well as many other payday lenders have come in for some criticism from various different groups. The main reason for this is due to the interest they charge. So obviously if you are considering applying for a loan from Wonga you want to know how much it is going to cost you.

How Much Do The Loans Cost?

On the Wonga website there is a simple way to find out exactly how much a short term loan from Wonga is going to cost you. There are two sliders, you set the amount you want to borrow and the length of time you want to borrow over. For your first loan you can borrow between £1 and £400. If you pay your first loan on time and want to borrow again in future the company will consider upping the limit. You have a choice of paying back from 1 to 30 days. The longer you borrow the money for the more interest you will be charged.

So as an example let’s start with a loan for £100. If you borrow that amount for just one day the total amount payable will be £106.54, so you will be paying £6.54 interest. At the other end of the scale if you borrow £100 for 30 days the total you will pay is £136.72 so you would be paying £36.72. The fact is that is not a massive amount of interest. If you need to pay a bill and will have the money in a few days time then Wonga could well be a good option for you.

Wonga get’s a little more expensive when you start borrowing more money. For instance, borrow £400 over 30 days and you will be paying £125.48 interest. So this is when it starts to get very expensive.

How Does It All Work?

So if you are considering getting a payday loan from Wonga, how exactly does the process work? We it is quite simple really. You fill in all your details and then if you are approved for the loan they will ask you for your bank account details. Then the money will be transferred to your account within an hour. Now, however you must pay them back. Most loan companies set up a series of payments, Wonga just take one lump sum.

So if you have said that you want a ten day loan, in ten days time Wonga will withdraw the full amount from your bank account. All you basically have to do is make sure that you have the needed funds in place in order to make the payment. That is pretty much it. What though if something goes wrong?

Missed Payment

If Wonga try and take the payment they are owed but find there are not sufficient funds in your bank account then things start to go a little wrong. They will charge you an initial £20 fee if you can not pay the repayment on the agreed date. Then you start to incur interest charges for each day you can not pay the debt back. They will try and contact you and help you to make the payment, but basically it will cost you.

If for some reason you can not make the payment, then they will sell the debt on to another company. Admittedly if you can’t make the payment then you really should not be considering applying for a loan, but the fact is that it will harm your credit rating and Wonga will pass the information on to other companies, so basically you may find it hard to get a loan from any other companies in the future.

Are Wonga For You?

So having looked at the evidence now you can decide if getting a short term payday loan from Wonga is for you. In the right circumstances they can be a very good solution, but if things do go wrong you can get yourself into some nasty debt. The charges can be expensive, but they are not to bad if you are just borrowing for a few days. There is no argument that this is a very good quick solution for emergency loans as you might call them, there is very little fuss involved in borrowing and as it’s all done online you don’t even need to leave the house.

If you look around online you will read both positive and negative reviews on Wonga. More often than not the negative reviews come from people who have not made the correct payment and got themselves into trouble. People who use the service properly seem to have no real problems with them.

If you are looking for a payday loan there is no doubt that Wonga are one of the best companies out there. If you need a small loan fast then by all means give them a try. However if you want to borrow a larger amount of money over a longer period of time then this company is most certainly not for you.

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    • profile image

      Raymond Chow 

      6 years ago

      Typically interest rates are given on a yearly basis but the rates here are for 30 days. Before comparing with rates elsewhere be sure to adjust for that. I believe such interest rates should be illegal.

    • andyoz profile imageAUTHOR

      Andrew Orrell 

      6 years ago from UK

      I agree that charging 37% interest seems a lot. But when you think some lenders in the UK charge over 100% interest then this lower rate is not that expensive. Wonga are far cheaper than some of the doorstep lenders who offer short term loans. Although as I stated, if you do miss the payment deadline then things can start to go wrong.

    • profile image

      EdB 

      6 years ago

      Nice article about the Wonga business model - which clearly benefits from charging interest on failed loan repayments - but I do think your classification of interest on 100 and 400 pounds needs some rewording.

      Charging 36.72 interest on 100 pounds means charging 37% interest. Charging 125.48 interest on 400 pounds means charging 32% interest.

      It's basic math errors like this that lead people to thinking that borrowing small amounts is better.

      And anyway, both 32% and 37% are insane rates of interest.

      Can you imagine your bank offering you 37% interest on your savings?

    • CASE1WORKER profile image

      CASE1WORKER 

      7 years ago from UNITED KINGDOM

      I think that money lenders like Wonga are lenders of the last resort- it would be better to ask for extra time to pay a bill or go without rather than pay the interest charges. I think the motto must be to check very carefully what you will have to pay back and when. Great hub which should make people think about borrowing money

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