Wonga was a UK-based payday loan company that was one of the largest lenders in the industry. It was founded in 2007 and quickly gained popularity due to its online platform and fast loan processing times.
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Wonga APR
Wonga offered short-term loans to borrowers with poor credit histories and charged high interest rates, often exceeding 1,000% APR.
Criticism Of Wonga
However, Wonga faced criticism and regulatory action over its business practices. In 2014, the company was ordered by the UK’s Financial Conduct Authority (FCA) to pay £2.6 million in compensation to 45,000 customers for unfair and misleading debt collection practices.
In 2018, Wonga collapsed and went into administration after facing a surge of compensation claims from customers who had been mis-sold loans.
Wonga Administration
Wonga’s collapse led to calls for greater regulation of the payday loan industry, and the FCA introduced stricter rules to protect consumers.
Today, payday loan companies in the UK are required to conduct affordability checks, limit the number of times a loan can be rolled over, and cap interest rates and fees.
The collapse of Wonga was attributed to the number of compensation claims made by customers who had been mis-sold loans, which had put significant financial strain on the company. Wonga’s administration marked the end of one of the largest payday loan companies in the UK.
The collapse of Wonga highlights the need for increased regulation and scrutiny of the payday loan industry. Payday loans are a controversial and high-cost form of borrowing that can trap vulnerable consumers in cycles of debt.
In recent years, the FCA has introduced stricter rules to protect consumers, including affordability checks, interest rate and fee caps, and limits on the number of times loans can be rolled over.
While the collapse of Wonga was a significant event in the payday loan industry, it also serves as a cautionary tale for borrowers.
It is important to carefully review the terms and conditions of any loan agreement, understand the interest rates and fees, and consider all other options before taking out a payday loan. Additionally, borrowers should seek advice from a debt charity or financial advisor if they are struggling with debt.
Alternatives to Wonga Payday Loans in the UK
1. Cashfloat
Overview: Cashfloat offers short-term loans with fast payouts and flexible repayment terms. They emphasize responsible lending and provide loans to individuals with various credit histories.
Loan Amounts: Up to £1,000.
Repayment Terms: Flexible, with options to repay early without additional costs.
Website: Cashfloat
2. Fair Finance
Overview: Fair Finance provides an ethical alternative to payday loans, offering personal loans with transparent terms and a focus on customer care.
Loan Amounts: Up to £1,000.
Repayment Terms: 6 to 12 months, with the option to repay early at no additional cost.
Website: Fair Finance
3. Drafty
Overview: Drafty offers a line of credit as an alternative to traditional payday loans, allowing you to draw funds up to your approved limit as needed.
Credit Limit: Up to £3,000.
Repayment Terms: Flexible, with interest charged only on the amount used.
Website: Drafty
4. London Mutual Credit Union
Overview: A not-for-profit financial cooperative offering affordable loans and financial services to its members. They provide payday loan alternatives with lower interest rates.
Loan Amounts: Varies based on membership and assessment.
Repayment Terms: Typically up to 12 months.
Website: London Mutual Credit Union
5. Creditspring
Overview: Creditspring offers a subscription-based service providing access to two interest-free loans per year for a monthly fee, helping members manage unexpected expenses.
Loan Amounts: Up to £1,000 per year.
Repayment Terms: Typically 4 months per loan.
Website: Creditspring
6. MoneyBoat
Overview: MoneyBoat provides short-term loans with a focus on transparency and responsible lending practices.
Loan Amounts: £250 to £1,500.
Repayment Terms: Flexible, typically up to 6 months.
Website: MoneyBoat
7. Lending Stream
Overview: Lending Stream offers short-term loans with quick approval processes and the ability to repay over six months.
Loan Amounts: Up to £1,500.
Repayment Terms: 6 months.
Website: Lending Stream
8. LoanPig
Overview: LoanPig provides flexible short-term loans with an emphasis on responsible lending and clear terms.
Loan Amounts: £50 to £1,500.
Repayment Terms: 1 to 12 months.
Website: LoanPig
9. My-QuickLoan
Overview: My-QuickLoan offers quick access to loans with a straightforward application process, catering to various financial needs.
Loan Amounts: £100 to £5,000.
Repayment Terms: Varies based on loan amount and assessment.
Website: My-QuickLoan
10. CashLad
Overview: CashLady is a loan broker that helps customers find suitable short-term loan options from a panel of lenders.
Loan Amounts: £100 to £5,000.
Repayment Terms: Varies based on the lender.
Website: CashLady
Important Consideration
- Interest Rates: Always review the Annual Percentage Rate (APR) and ensure you understand the total repayment amount.
- Repayment Terms: Choose a repayment plan that aligns with your financial situation to avoid further debt.
- Eligibility: Check each provider’s eligibility criteria before applying.
- Credit Impact: Be aware of how applying for and taking out loans may affect your credit score.
Before committing to any loan, it’s advisable to explore all available options, including credit unions and other community-based financial services, which may offer more favourable terms. Additionally, consider seeking financial advice to ensure that borrowing is the right decision for your circumstances.
Previous Wonga Head Office Address
Wonga went into administration and any subsequent correspondence is handled by Grant Thornton.
Old Wonga Address
Grant Thornton UK LLP,
4 Hardman Square,
Spinningfields,
Manchester
M3 3EB