Frequently Asked Questions

Here are our answers to some of the most widely asked questions about Wonga. If there's something missing about who we are and what we do, then drop us a line and we'll try and help out where we can.

1Do you charge charge thousands of per cent in interest?

No – never. We currently apply a simple interest rate of 0.8% per day. As an example, a loan of £100 borrowed for 30 days would cost £24 in interest. Our APR (Annual Percentage Rate) doesn’t show the actual interest rate you pay. - APR is a measure designed to compare the cost of loans on an annual basis, and doesn’t reflect the cost of a Wonga loan because we only offer loans for around a month. If a customer doesn’t repay, we’ll freeze the balance 30 days from their repayment date to stop the balance spiralling.

Representative example:

Amount of credit: £100 for 13 days. Interest rate: 292% pa (fixed).
One total repayment of £110.40. Representative 1,509%APR.

2Why is the APR so high?

APR was designed to normalise and compare the cost of traditional loans or credit card balances of several years. For a Wonga loan of a few days or weeks, the equation not only multiplies the actual period of interest up to a year's duration, but also compounds it, assuming interest-on-interest many times over.

The result is a distorted number that bears no relation to the actual interest involved.

Martin Lewis of MoneySavingExpert sums it up perfectly with this example in one of his blogs : “Over a short term APRs are often irrelevant, after all if you borrowed £20 and paid someone back and bought them a pint (£3) the next week, that sounds pretty reasonable. Yet if you were to take it as a loan, and compound it, it’d signify a 143,000% APR – far more than Wonga’s APR.”

3These products might be transparent with how much you need to pay back, but surely you quickly get into trouble if you don’t pay back on time?

We work hard to make sure we try to only lend to those who can repay, but having now processed millions of applications, it’s always possible to find examples where we unfortunately haven’t got it right, or someone’s circumstances have changed.

If things go wrong, we always try to contact the customer via our in-house collections team and usually try to draw up a repayment plan. We have also set up a dedicated hardship team to offer any help we can to people experiencing serious financial difficulties.

Finally, if we can’t contact someone or agree a sensible repayment plan, our policy is to freeze all balances after a maximum of 60 days from the agreed repayment date. This is a safeguard to ensure a relatively modest balance can never spiral endlessly out of control.

4Shouldn’t the cost, or rate of interest be capped for short term loans, like in some countries?

The Treasury has announced plans for the Financial Conduct Authority (FCA) to cap the cost of credit for short-term loans in the UK, from January 2015, although the type and level of these caps has not yet been decided.

The Government had previously concluded that a price cap could reduce access to credit, cut the supply of credit and weaken competition - following in-depth research published in 2013 by the University of Bristol – so we believe the model to be implemented needs careful consideration.

Rate ceilings introduced in countries such as France and Germany appear to have led to credit exclusion and have exposed certain borrowers to inappropriate products and significant risk. Click here for the research article.

5Is Wonga a 'soft target' for fraud?

We take every case of fraud seriously and the idea that Wonga is a 'soft target' for fraudulent activity is another myth surrounding our service.

Wonga developed the world’s first fully-automated lending platform and we assess thousands of data points to make every loan decision. We buy public data from a large number of sources, including the major credit agencies, and validate all applicants using industry-standard practises.

We have processed millions of applications over several years and have used this experience to also develop and evolve our own internal authentication techniques too. We continually monitor the methods fraudsters use to avoid detection and improve our prevention processes to screen out the vast majority of these cases.

6Why wouldn’t someone use a low-interest credit card instead?

Not everyone has got, or wants to use, a credit card - which is typically a long-term commitment. They can represent very low-cost credit if used carefully, but it’s easy to spend on a credit card while sometimes harder to get rid of the resulting debt.

A Wonga loan has a finite size, length and amount of interest so credit cards can, in some circumstances, incur far larger debts over a much longer period of time.

A large majority of Wonga customers have access to mainstream financial products but choose to sometimes use Wonga instead. When asked in our latest survey why this was, the most common answers were speed (48%), simplicity (44%), its short term nature (41%), transparency (39%), convenience (32%) and flexibility (31%).

Representative 5853% APR

7Who are the investors in Wonga?

We’re backed by leading global technology investors and philanthropic organisations including Accel Partners, Balderton Capital, Dawn Capital, Greylock Partners, Meritech Capital Partners and Oak Investment Partners.

An occasional social media myth is that Adrian Beecroft (Chairman of Dawn Capital) is in some way the ‘boss’ of Wonga. The reality is that Mr Beecroft joined Dawn Capital as Chairman in 2010 - two years after the business’ first investment in Wonga in 2008. While Mr Beecroft chairs one of Wonga’s investors, he has no involvement with Wonga’s board, management or operations.

8Is Wonga regulated?

Yes, we're authorised and regulated by the Financial Conduct Authority, Interim Permission Number 611974. We are members of the Finance and Leasing Association (FLA). Our code of practice spells out exactly how we operate and how consumers can expect to be treated. We’re also committed to the FLA Lending Code and the Good Practice Customer Charter for short-term lenders.

9Can taking out a Wonga loan harm your credit rating?

As a responsible lender we buy public data from a number of sources, including the major credit agencies. We're also obliged to provide information back to the agencies as part of this process.

Here's the view of two of the major credit agencies on how short-term loans can affect your credit rating.

“If a consumer takes out a payday loan and repays that loan on time the effect of such on the consumers credit rating could well prove positive. In some cases, if used responsibly, payday loans could help to improve the credit profile, especially those with either little credit history or those with a previous history of missed payments and arrears. However, it is difficult to generalise as the overall interpretation of the details contained on a consumer’s credit file is down to each individual lender.”

“Lenders create their own credit assessment scores and will include a complex selection of data sources within such scores. The lenders own experience based on the relative risk associated with different data, which includes previous loans and their performance, will be taken into account and could vary from lender to lender and for different subsections of consumers within each lender’s book.”

“Late and missed payments and large volumes of loans would have a negative impact on a consumer’s credit profile. However, for many lenders taking and repaying a payday loan will have a neutral or positive impact across large sections of their customer base. However, interpretation is at the individual lender’s discretion and some may view a payday loan as having a detrimental impact on some consumer’s credit worthiness.”

“If you repay the payday or short-term loan on time and in full then any effect on your credit rating could be positive.

“When lenders check your credit report they are looking for evidence that you are a responsible borrower. Repaying a payday loan on time and in full should therefore strengthen your case, because many payday and other short-term loan providers are now sharing customer records with Experian. Saying that, some lenders might see the fact that you’ve taken out a payday loan as a sign that your finances are under pressure.

"Importantly, lenders’ scoring systems are built by modelling actual customer data. As a result, if a particular lender’s experience is that customers who take out payday or short-term loans are more likely to miss their repayments, this will be reflected in their credit scoring. Actually, some of the lenders that use Experian for credit checks don’t currently differentiate between payday or short-term and other types of loans, so they wouldn't be able to discriminate anyway. So if you do take out a payday or short-term loan, just concentrate on paying it back on time and you shouldn't hopefully have any problems.”

10How much of your revenues do you ‘write off’ as bad debt?

The industry-standard method of assessing this is to compare the amount ‘written off’ with the amount of money lent, much like banks and credit cards do.

In our case this figure is 7%, which compares favourably with traditional financial products such as credit cards.

Thank you for your submission

Given the large amount of enquiries to Wonga, we will not be able to post a response to every question. We will reply to your request within 48 hours and let you know of our decision.

Warning: Late repayment can cause you serious money problems. For help, go to