Wonga announced that today that after a review by the Financial Conduct Authority (FCA) they are writing off 330,000 customer’s debts and cancelling interest and other charges for 45,000. Wonga will be handling all cases themselves – even if the debt has been sold onto a third party.
What do Wonga customers need to do?
All affected Wonga customers will be notified by 10 October whether they have been included in plans. If you haven’t been contacted by this date and believe you should have been, call 0800 042 0210 from a landline, or 0333 003 0830 from a mobile.
The FCA and Wonga state that all customers should continue with repayments as normal until they have been notified.
New lending criteria
As part of the FCA’s review of their business Wonga are implementing new lending criteria, with potentially stricter loan to income ratios.
To ensure loans are limited to those who can afford them there will be a 30-day delay before reapplying if you are rejected for a Wonga loan or have missed any repayments, as of today.
Payday loans can be a very expensive way of borrowing money, the representative APR frequently runs into the thousands. But with income squeezes in recent years credit has become a necessity for many. There are a number of alternatives to payday loans which may be cheaper, even for those with a poor credit history:
- Take out an authorised overdraft. If your bank account doesn’t already have an overdraft facility available to you, speak to your bank to see if you can get one. Authorised overdrafts charge an APR of around 15-30%, which is much cheaper than the 2,000% plus you might get with a payday loan. Our current account comparisons can help you find a bank accounts with authorised overdrafts.
- Withdraw a credit card cash advance. If you need cash fast, then a credit card cash withdrawal could be a quick option. The interest will be charged to you immediately and will accumulate daily, but borrowing around £500 will be cheaper to pay back than with a payday loan. There are many different credit cards available, including many with an interest free period, but a credit building card is a good alternative for those with bad credit.
- Join your local credit union. Becoming a member at your local credit union could be a much cheaper way to borrow money than payday loans typically charging around 12.7% APR. They are run by their members, so they can be more understanding to your situation than a typical financial institution.
- Get debt help. If you are in financial difficulties, before you borrow money or take out a cash loan, our debt management help guides and articles to get information on your situation that could help you get your finances on track.