Wonga Group: Wonga
History and Ownership
Wonga Group Ltd trades as Wonga in Poland, South Africa, Spain and the UK. The brand was previously active in Canada, but this ceased in May 2016. The Group had also expanded into business loans locally through Everline, but this project has been sold on. The local subsidiary is WDFC UK Ltd with the HQ sticking nearby in London. Errol Damelin’s payday loan venture opened for business in 2007 and we’d see them peak in the summer of 2013. Wonga’s rise to the top was guided through innovation, but aggressive advertising made the key difference to counter the challenges faced by such powerhouse firms as PaydayUK and QuickQuid.
Not long back it looked like the payday giant was in serious trouble when they reported a loss after tax across the 2015 year of £76.5 million. From compensation payouts, to loan write-offs, price capping and frequent attacks from the media it is surprising how they have managed to stay on top of things. It is clear of course that they’ll struggle to recapture their golden years when they had been issuing more than 10,100 loans daily. Their customer base had surpassed 1 million, but this dropped down to 600,000. This was referenced from a report a few years back and so they may have rebuilt that user base.
Info: Wonga Loans
www.wonga.com (Alexa UK Rank: #8080)
Wonga’s fast and flexible short term loans were unveiled in 2007. This more personalised loan product was greatly welcomed back then, since at the time you could only really borrow until your next monthly pay date. For the first time, an applicant could choose exactly which day they could repay the funds back. The exact amount to the £1 could also be selected. Funding was quickly processed and this lender operated 24/7 and so they were always there for the borrower. You can see how they soon became very popular especially as a handy overdraft alternative when the banks were quickly declining requests when their customer scores weren’t tip-top.
A few product changes have occurred in recent years. They have for instance cut back their customer support hours to Mon/Sat (7am-8pm) and Sun (8am-5pm). They had started from £1, but this has also increased to £50. As a result of capping they have at least added the option of a 3 month repayment (and now 6 months). As it stands, a first time borrower can pick any amount between £50 and £400 across the range of 1 to 35 days. £1000 is then available when reloaning. The 3 month option is placed on the Wonga Flexi Loan that has differing sums of £150 to £500 (£1500 return). The recently added 6 month option sees £200 to £600 (£2000 return).
Daily interest is charged at 0.8% for short and 3m (0.75% for 6m). The rates works out lower than this since this is taken against your reducing balance. For some pricing examples, if we take £100 across 7 days the cost would be £5.60 or £24 over 30. Flexi’s cost of £300 on the 3 month term comes in at £155.97 whilst 6 is £279.37. Whilst their advisors no longer work around the clock, the chance of 24/7 funding is possible to customers who have already taken out a loan (subject to approval). Lending decisions are automated here thanks to their sophisticated tech. At the same time, quick early settlements can be processed through the Wonga login housed at www.wonga.com.
Reviews: Feefo, Review Centre, Reviews and Trustpilot
Across these review platforms there are only active pages on Review Centre and Trustpilot. The score on the Review Centre isn’t great at 54% that has resulted from 350+ feedback. Trustpilot is much improved at 85% from just over 1000 reviewers. The market leader has clearly been controversial in some areas such as debt collection in the past and so it is understandable to see a mixture of good and bad feedback. Moving forward we’d expect more positive scoring through the implementation of the Wongability scheme. Tighter lending controls should also lower default rates. This helps since it is those that run into repayment problems that tend to vent on review sites.
Many short term lenders like Wonga have come and gone over the years. Most of which struggle to compete on exposure levels from advertising and search engine clicks. There are a few rivals that have been playing catch-up though. SafetyNet Credit has for instance quickly emerged to become the UK’s 2nd most visited short term lender (they recently took over QuickQuid). SafetyNet’s line of credit enables 24/7 payouts up to a determined limit and they also offer overdraft protection (if you choose to switch on). This innovation has helped the firm to notch up industry awards. MyJar is another high flying competitor well known for automation and rapid speed.
Cash Asap is a worthy alternative if you are looking for a lender with similar characteristics. They did offer the same matched term options of 1 to 35 days and 3 months (obviously 6 months is a new development). Their amounts also rise in £1 increments and they are open 7 days a week. The rate of interest is a actually a little lower with them. QuickQuid has different repayment options of 1, 2 or 3 months. They are however the closest matched on the popularity front. It is companies like QuickQuid and Sunny that have been biting into Wonga’s market share, generally due to the huge ad spends that each have spent.
The Plus Points
It has certainly been a rocky road for the biggest player in short term lending. They do however look to have turned things around. The important point is that they do generally offer the best overall service especially in the flexibility department. Since capping was rolled out many big firms adapted to focus on getting customers on extended contracts. It is good to see that you can do this here and also opt to just borrow funds over a few days for sums to the exact pound issued 24/7 (when approved). It is not easy to pick out faults here, although lower interest and perhaps the reintroduction of their promo codes would be greatly welcomed.
Last Updated: January 5th, 2018.