Well, that was a brief existence in the light.
Britain’s biggest payday lender, Wonga, is teetering on the brink of collapse following a surge of customer compensation claims in recent weeks that could cause it to call in administrators.
As careers go, Wonga’s was brief but fiery. Much of the criticism of its lending practices amounted to artificial outrage. The high interest rates being quoted were used to condemn it, but, like the other payday lenders, these rates were for short-term loans of a few days or weeks, so the actual amount being repaid wasn’t too bad. That is, if you needed their services and if the high interest rates were a problem, then this wasn’t the vehicle for your borrowing needs. Can’t say I would recommend it, though, as running out of salary before the end of the month is in danger of becoming a vicious cycle as I recall from my experience many years back. I used an overdraft – cheaper and overall managed better. But, again, the same cycle. In the end, only reducing my outgoings resolved the issue.
All that said, I believe Wonga was unfairly vilified. Using APR as a measure was unreasonable for the reasons stated above – this was for short-term borrowing. Still, I suppose Quick Quid will clean up…
Sky News said the recent cash injection from investors had prompted a fresh wave of compensation demands from claims management companies, which have been raking through old loans taken out by consumers.
Anyone who thinks Wonga were bad…
I thought that the high interest rates were to compensate for the fact that lending to people with a poor credit history is quite high risk.
That too.
and yet again. All those that use this sensibly and won’t get credit elsewhere will lose out.
Our government really is the enemy of the poor.
Quite so. Although in this case, it wasn’t so much government as agitation from the usual suspects who really are the enemies of the poor.
There seem to be a raft of these companies popping up now. I wonder if any will do any better in the long run