Mumsnet has not checked the qualifications of anyone posting here. Free legal advice is available from a Citizen's Advice Bureau, and the Law Society can supply a list of local solicitors.
Has anyone used Wonga before?(34 Posts)
I've recently been hit by an unexpected repair bill, don't have time to arrange an overdraft and don't particularly want to burden any friends or relatives (who probably don't have the spare cash anyway) to ensure I can make it to my payday.
I've looked at Wonga for a quick payday loan, who will charge me £45 for £400 over the next two weeks.
Has anyone used them before? Was it as bad as everyone seems to think? What was the reason you went for it and how did it turn out?
Thanks in advance.
The thing to consider is whether when you pay the Â£445 back on payday, you will be short for the following month.
The risk with payday loans is the cycle you can get in of borrowing every payday. If you can pay the Â£445 and then not need to borrow again then go for it but if not then steer clear.
Anyone I know that has trouble with payday loans is because they have borrowed repeatedly until it is unaffordable to pay back.
Hope this helps x
Yes, I did. Unexpected expense a week before pay day, no other source of funds. I borrowed the absolute minimum needed to pay the bill and I knew that I would be able to repay the loan in full before the due date.
The money came through quickly and I paid slightly less interest as I repaid early.
They didn't hassle me to take out any more loans and I never had.
All in all, it worked well for me, in that specific situation.
It's a no-go, imo, if:
- There is any chance you'll have to extend the loan period
- You are tempted to borrow more money that you need for a "treat"
- You are going to take out a mortgage in the next few years (some lenders see it as showing you're a bad risk)
- This isn't a one off problem and you're in a precarious/chaotic situation with money in general.
And yes, Natalie's right. £400 is a lot to find yourself short of in 2 weeks time.
Can you genuinely reduce your outgoings over the next month by £400 so that you aren't in a similar position this time next month?
An overdraft takes minutes to arrange online or over the phone. I'd try the overdraft route before wonga.
Yes. It was fine. I borrowed, I paid back, I moved on.
I wasn't sucked into a cycle of debt misery that some people will claim will definetly happen. Just like there are people who can have a glass of wine without turning, overnight, into a raging alchoholic, there are also people who get into a tight spot and borrow money without ending up homeless and utterly destitute.
Thanks for your replies guys.
I've talked to a few friends about it, and they said they'd never want to do it because they'd feel embarrased about it? Did you find that at all? I would feel more embarrased about getting the money from them!
Was it pretty simple to use and pay back then? I've heard a couple of rumours of them getting pretty nasty if you have any problems at all with repayments, I'm not anticipating any obviously but still want to be wary.
The £400 is to cover an unexpected repair and some pest control charges, which will be one of payments so I'll be absorbing the cost over my next payday and cutting down on expenses.
It was all online so I didn't have any direct contact with anyone from Wonga.
They will be "nasty" (ie hit you with high interest and charges) if you don't pay back. They will also take the money from your debit card whether you authorise them to do it or not, so you can't just not pay - if there's money in the account they will take it, and if they push you into unauthorised overdraft so you get clobbered by the bank, so be it.
They do. not. care. They just want their money (plus interest).
So, yes. If something unexpected comes up and you can't pay it back then you'll be forced to take out another loan, or like I say they'll just take their money whether it'll leave you short for your rent or not, or chase you if your account's empty.
But as long as you know that, and are sure you can pay back - ie prioritise the Wonga loan over everything else, including food, electricity, rent, then meh, it's not embarrassing - who would ever know?
But perplexed the overdraft would take longer - I have £1000 overdraft and it costs about £12/month - less than wonga will charge and probably less bad for my credit (though still not great obvs)
1500 per cent interest rate. And that is AFTER being forced to cut it.
keep in mind what kind of interest that is. if you have to pay 45 quid for 400 pounds over two weeks, that's about a whopping 300% per year. basically any bank will beat that in any form, with overdraft probably the best. In fact, a credit card beats that by a long shot (they are usually 15-25%). so, if you just took 400 out on your credit card, at 18% (which seems pretty standard), over two weeks you would owe approximately an extra 1.50. Credit cards also give you the flexibility of not paying the full amount.
my impression is that wonga etc are really a last resort. Their interest rates, if your numbers are any indication, are sky high.
No personal experience but a friend has fallen for the quick fix of wonga, not thinking about the impact it would have on next month etc.
Have you anything to pawn? Anything you could sell?
Also I was told by pal that having payday loans on credit file is a red flag to future lenders.
Yes I've been asked if we've used wonga etc when applying for other credit so sure it's a red flag for some things.
You can arrange an overdraft pretty quickly in some cases. For my bank account it can be done online.
explore other options first, bank overdraft, pay advance from work...
agree with others, if you have the money in principal, just not right now, it's worth considering. do your maths, overdraft might even be more expensive than payday loan - if you can repay within a month.
I live on my overdraft and change it depending, I can do it online or over the phone.
I found that the call centre is really friendly and sympathetic.
When ds was a baby and his father left I regularly had to pawn my jewellery to pay the rent.
Even a few odds and ends can add up to a fair amount .
Thanks everyone, this is really helpful!
That's interesting, I always thought that the media uproar was always created by those abusing the system (i.e lying about their employment status or income) who made the company seem immoral and like they purposely put people into a cycle of debt. It's called a payday loan for a reason, you're supposed to be getting some money in soon after taking it!
I think I'll only use it when all other options (overdraft etc.) aren't possible, but generally I'm worried that I'll end up depending on Wonga if I ever do use them, getting used to spending more freely and having to use them more that once. Has anyone experienced anything like this?
Ok, when I was much, much younger, I got into a bit of a spiral with cashing post dated cheques (I am quite old - this is before online banking/loans were a thing..).
It was a culture thing within my workplace. If we wanted to go out the week before payday when we were all skint, we'd go to the cash office and the cashier would cash a cheque for us (£10 or so) but not bank it until pay day. Of course, I never budgeted for the cheque coming off so was inevitably short again come the following pay day.
Quite reasonably, head office clamped down on this, and we could no longer get this sort of free cash advance. However, cheque cashing shops had opened up which worked in a similar way to Wonga (I guess they still do), in that you could write them a cheque for say, £50 and they'd give you £40 cash for your pre-pay day night out/bill/whatever.
So, yes, quite a few of us got reliant on these "advances" and were permanently a week behind with money. Not smart. But we were young, and stupid, and had no dependents, and weren't thinking about the future.
I'm smarter now...
Oh, and what did I learn from that experience?
- Don't borrow money without a plan to pay it back - ie a plan for how you're going to reduce spending or increase income to cover the amount borrowed.
- Doing things with money that you can't afford to spend is not a "treat". Saving feels better.
Can the repair bill be paid within a couple or few weeks? Will they except that? Can the local authority not help with pest control? There may be a charge but you might be able to delay this, too, and it might not be very expensive. Environmental Health might be the way to go with the pest problem.
I don't know your situation but I wonder if a budgeting loan might be possible? 'Budgeting Loans are interest-free so you only pay back what you borrow. You normally have to repay the loan within 104 weeks.' Details on the gov.uk website. Eligibility is IS/JSA/pension credits. So may not help your particular case.
DON'T DO IT!
It'll mess up your future. Some mortgage companies will NEVER offer you a mortgage if you have EVER had a payday loan.
Just ask your bank for a short-term loan, seriously. £400 is tiny.
I don't really understand why you can't just delay the repairs for two weeks and pay in cash then?
I think these companies are immoral. Not sure how someone can justify an interest rate multiple 1000s higher than the Bank of England base rate. These companies target those with small incomes hoping they'll get caught in a cycle of debt. Horrible. I'd avoid at all costs.
Join the discussion
Registering is free, easy, and means you can join in the discussion, get discounts, win prizes and lots more.Register now
Already registered with Mumsnet? Log in to leave your comment or alternatively, sign in with Facebook or Google.
Please login first.