Wonga Scam Uncovering The Truth Behind The APR

Wonga Scam, Clearing Up The Rumours

Wonga has had many accusations in the past that company is scamming money off the public, so this article has been created to help put people’s minds at rest and to clear up and rumours that have been put into the public domain, surrounding the subject Wonga Scam.

Payday loans aren’t a new concept; they have been about for years but have only just recently taken off due to the state of the economy, the more people learn about them = the more that the Wonga Scam theory will be flawed.

A Few Quick Facts:

• The payday loan is a quick cash scheme where you can apply and get the money within an hour of being accepted.
• The loan amount is usually no more than £500 as it’s a short term loan.
• The loan is usually repaid within a 31 day period.
• You don’t have to have a perfect credit rating, and no credit checks will be taken.
• You will need to be 18, and in full time work.

Why The High APR?

Most people will think there is a Wonga Scam because of the APR rate. The fact is all payday loans have a high APR rate, and why? This is down to the short period of time the loan is taken for.

APR stands for Annual Percentage Rate, so it basically calculates the rate of charge for a whole year and expresses interest and other fees as an annual rate. That is why the APR is high for payday loans, because it’s an annualised measure that wasn’t designed with short term loans in mind. So with Wonga’s flexibility and short term loan the APR will be shown as a high rate, so there is no Wonga Scam in place just a misunderstanding on the term and knowledge surrounding the APR.