Wonga Loans - Scam or Genuine?

craig_29

Hi all,

I'm just posting a quick question on behalf of a friend who is looking at taking out a payday loan to pay for some car repairs after his MOT came back with a few problems.

I really haven't a clue how to advise him on this subject and would like to know if anyone has used these before? whether they would recommend them or steer clear of them?

I have read a review here - wonga loans review

and I see that there APR is incredibly high.

Is this the best course of action for my friend to take to getting quick cash for the repairs or are there lots of catches involved?

Thanks in advance for your help.

JasX

They are a legitimate business but INCREDABLY expensive and your friend would be well advised to steer well clear if he has any other options, if he's in sufficiently dire financial straits to need to use a payday loan company there is serious potential for things to go very pear shaped should any other financial 'emergency' crop up as the rollover / missed payment / interest fees are astronomical to the point of being insane.

Could he talk to his bank? friends/family etc?

climbgirl

You need to be very careful with payday loan companies - they are ruthless. The APR is extremely high, but it's a little misleading as the loans are generally short-term (I think Wonga is 30 days) and for smaller amounts of money (hundreds, not thousands).

If you borrow the money and stick to the repayment terms, never missing payments they are fine.

If you can't repay for any reason, that's when the trouble starts. They will try to take payments several times a day from the card details given to them and their fees and charges are extremely high. They won't give any warning that money is coming out of the account, they'll just take it and it's very hard to contact them to get it back. It's all in their T&Cs so they're not operating illegally.

Frankly, I'd avoid them like the plague. It's not a scam, they are legal businesses providing a service. If you stick within those terms, fine. But if you don't, then it can be a nightmare (and let's face it, if you're considering using these types of lenders as a loan source there are usually other money issues involved, they target people who can't get credit from more conventional sources).

Gothicfairy

I had never used any payday loan company until it all went pear shaped 2 ish months ago. I borrowed £250.00 from Wonga and got the money within the hour, I paid it back early and had no trouble at all BUT I think they are not the best option and can lead to a hell of a lot of problems if people can't pay them back on time or pay the fee..The APR is a bit of a red herring as they are only meant as a short term loan over a month at the most so it is a bit misleading I think.

I would suggest trying a friend or family member but in my case I have neither ...billy no mates and all that, but it did work out ok for me but just reading the hundreds of payday loan threads here would suggest that most don't find it works well.

opinions4u

Cars cost money to maintain.

While your friend may not know if the next cost is going to be a new tyre, a new clutch, a replacement gear box or whatever, he/she does know that bills are inevitable at some stage.

To avoid being in this position in future, my best suggestion is that your friend sets aside a sum each week/month for car expenses in a savings account.

Then when unpleasant bills crop up Wonga.com aren't a necessary consideration.

brokeinlondon

I second everything everyone has just said. I've used payday loans in the past - not Wonga though, but have heard a few horror stories about them! - and I can only say AVOID THEM LIKE THE PLAGUE. Perhaps your friend can see if they can extend their overdraft or borrow from friends/family... they should do anything (legal) that they can rather than go to Wonga! Trust me!

Also I agree that for the future they should set up a savings account for car expenses so they're not short of cash next time another car emergency crops up.

All the best,
M

craig_29

Well, I would like to thank everyone for their input, and for the advice you have all given to me. I appreciate your help.