Advice - Paying off Wonga Loan

messyfreckle

I got myself into a mess with a Wonga loan in 2011 and have been unable to get out of the cycle. Every month I have paid it off in full, but then had to reapply to get me through the next month. I know this is bad for my credit rating and bad just in general. But short of a lottery win, I was stuck.

However, I received a letter after Christmas saying that the credit limit on my Capital One credit card is increasing by £600.00 on the 23rd (Wednesday) and figured I could put that money towards my Wonga loan which will mean I can completely clear it this month and be free of Wonga once and for all.

The problem is, how to do it?

Initially I figured i'd just withdraw the cash from the ATM, and then go deposit it in my bank. I know there is a charge for withdrawing cash from a credit card, so I figures I'd withdraw £500.00 (leaving £100.00 on the credit card to cover fees for cash withdrawals). But i'm not sure if this is possible. I've had a look online and have seen people saying the charges for withdrawing cash are horrendous. Is this a viable option?

What is the maximum daily withdrawl limit from an ATM on a capital one card?

My other option was to do a part payment of the £500.00 to Wonga from my credit card, but looking at their terms and conditions, this isn't an option.

I just wondered if anybody had any idea of the best way to go about this? I know it's not great borrowing on a credit card and all that, but surely it's got to be better than Wonga? I can at least manage the repayments on the credit card on a monthly basis without getting further into debt.

Any help would be much appreciated!

chanz4

whos the card?

poodlegal

The cash that you withdraw from a cc will be charged at a higher interest rate. But it may be worth doing if you will be able to pay the money off fairly quickly as the interest charged on the cc will still be a lot less than Wonga. Failing that if you were really organised you could put living expenses for a month on the cc (food, petrol etc) meaning you freed up money to pay wonga. You would have to be very strict with yourself though as the last thing you would need is the cc debt and the wonga.
Hope someone more knowledgeable comes along, i'd be interested in the best way to go about this. Good luck.

messyfreckle

chanz4 wrote: »

whos the card?

It's Capital One - sorry I forgot to mention that in original post, but i've edited it to add now.

messyfreckle

poodlegal wrote: »

The cash that you withdraw from a cc will be charged at a higher interest rate. But it may be worth doing if you will be able to pay the money off fairly quickly as the interest charged on the cc will still be a lot less than Wonga. Failing that if you were really organised you could put living expenses for a month on the cc (food, petrol etc) meaning you freed up money to pay wonga. You would have to be very strict with yourself though as the last thing you would need is the cc debt and the wonga.
Hope someone more knowledgeable comes along, i'd be interested in the best way to go about this. Good luck.

Unfortunately living expenses alone won't make the difference. I'd have to pay all the bills from the credit card too, but since they're all direct debited from my current account, that's not possible.

It's frustrating, as i'll technically have the money there to pay the Wonga...it's just how best to move it to my current account. I've a feeling the only way is to withdraw the cash and pay it in, but i'm just hoping someone might have another idea, or can at least reassure me the charges for withdrawing cash won't make this a pain in the !!!! to do.

FireWyrm

Actually, its pretty easy, but you have to do it step by step

First, dont withdraw cash. Cash withdrawals are charged at something like 34% for the life of the balance and are paid off last. So, if you pay the minimum payment, very little will go to paying the cashwithdrawl part leading to much higher interest payments in the long run.

So.

1) Cancel you're DD's and phone each creditor. Tell them that you are sorry, but you will have to make a physical payment this month via your credit card

2) Carefully spend only what is absolutely necessary on groceries and petrol on your card...not via cash

3) Use the money that would have been taken by the DD's to pay off Wonga finally

Do it in that order. Next month, you can reset the DD's and make a plan to pay the CC off quickly.

Whatever you do, DO NOT WITHDRAW CASH on a credit card. The rates are actually comparable to Wonga over the longer term because of the higher interest and hierachy of payment schedule.

boleyn1536

Hi messyfreckle

I'm in a similar situation! Couldn't you just log into your Wonga account - add a new card (your Capital One card) and use that as payment?

FireWyrm

boleyn1536 wrote: »

Hi messyfreckle

I'm in a similar situation! Couldn't you just log into your Wonga account - add a new card (your Capital One card) and use that as payment?

God no! That counts as a cash advance!

sourcrates

Hi,

Did you know wonga will allow you to repay your loan at ANY amount you can afford ?. If you do not repay your loan on time you will im afraid get charged by them, but after a few days the "payment arrangement" option appears on your account, its usually for 3 months to spread the outstanding balance, and you can choose the first repayment date up to 30 days in advance, also if you write to them, better than ringing, proposing a different repayment shedule over a longer period, they will accept it.
Your credit rating will suffer, and you will have to pay interest up until arangement is agreed then interest is frozen, this way you only pay what you can afford and it breaks the cycle of been reliant on payday loans, beleive me i know. Just an option for you to think about, works out best in the long run in my opinion. One thing though, you must not have money in the account you have registered with wonga as they will make multiple attempts to get there cash until you agree a repayment plan with them, this is critical as they take money in small amounts multiple times.

gembob_m

I've been stuck in the wonga rut for a good year...silly me! Only this time I couldn't afford to pay back what I owed this payday so I sent them an e-mail today explaining the situation and they got back to me in a couple of hours and arranged a payment plan for me, I found them very helpful. I feel so much better as I've been worrying about this for ages so much I lost my appetite x

boleyn1536

FireWyrm wrote: »

God no! That counts as a cash advance!

I've just discovered myself, that Wonga only lets you add debit cards to your account, not credit cards. Frustrating.