Wonga Collapse - What Will Happen to Their Customers
Payday lender Wonga are no longer accepting new loan applications. Are you a Wonga customer? What should you do now?
The news that short-term lender Wonga are on the brink of collapse has come as a shock to many. But most of all, its customers. If you're a Wonga customer, you may be worried about will happen to you now. Do you have a loan with Wonga? What should you do? Ferratum are here to help guide you through how best to manage the situation and what you should consider now that it's no longer a fallback option for you.
Do we even need short-term lenders anymore?
There will definitely be some people cheering about the downfall of Wonga. But for some people who use the products responsibly, short-term loans are a real lifeline. The interest is high, but factoring in the interest of £36 on a one month £150 loan might be the difference between keeping a family afloat or defaulting on several direct debits. And in that scenario, you might be faced with an unarranged overdraft fee as well as several late payment fees to different companies that could easily start to run up to £100 or more! If you're living paycheck to paycheck and your car gets a flat tyre, how do you get to work for the rest of the month? Having the ability to access cash to sort real-life problems and repay on payday can be something that genuinely stops people losing jobs or ending up with masses of unpaid bills.
And there may not be many other options for people who don't have the high credit scores needed for traditional bank loans and overdrafts. Look at the hire purchase stores you find on the high street, or high-interest credit cards, these less regulated industries could have you repaying a lot relative to what you initially borrowed, and for longer too. And what about loan sharks and other unregulated alternatives, if consumers need the product, they'll still find it, but without the protection of the regulatory bodies.
Short-term lending is not a long-term solution to money problems, but there is a need for the products for responsible consumers who might be at a financial low point. Remember that short-term lending is growing, the flexibility of products offered is expanding all the time. Ferratum offers not only a one-month repayment loan but a flexible instalment product that can be repaid in 2,3 or 4 months.
I'm a Wonga customer, what should I do now?
If you've got an open loan with Wonga right now, there's no need to panic! Repaying your loan as per your contract is the best course of action. Whatever happens to Wonga, your contract still stands, and you could find that the open loan debts are sold on and collected by a company you've never even heard of. And don't forget that your credit report could be affected if you fail to repay as agreed, and this could make it harder to be accepted for credit from other companies like Wonga in the future.
Once you've repaid, you'll be done with Wonga, which should come as a relief! If you find yourself needing a new loan company in the future make sure you do your research about what different lenders have to offer, and always ensure that they are regulated by the FCA. Review websites can also be a good way to see how customers feel about the lender you're considering. Ferratum has a 4.5 rating on Google Reviews and a 4-star rating on Trustpilot, with hundreds of reviews from our happy customers.
The future for loans like Wonga
With the uncertainty surrounding one of the most well known short-term lenders, consumers may feel nervous about their options in the future. As Ferratum has always operated as a responsible lender, our customers have no cause for concern. We are committed to lending responsibly and never lending to customers who won't be able to afford to repay their loan, and if you ever run into trouble repaying, our award-winning customer service team are on hand to help you manage your repayment. If you want to find out more about Ferratum's loans, check out the loan slider to find out what a Ferratum loan will cost you.
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