The financial consequences of missing payments were terrible for Wonga’s borrowers.

The financial consequences of missing payments were terrible for Wonga’s borrowers.

For Wonga’s borrowers, the economic consequences of lacking repayments were terrible. Wonga ended up being a lot more than happy to roll over loans all things considered, at an APR of over 5000%, rolling over financing (indefinitely, if at all possible) had been unquestionably in its passions. certainly, its enterprize model actually depended on a proportion that is substantial of continually rolling over loans at excessive rates of interest. However in 2014, the FCA announced plans to cap the interest rates that payday lenders could charge and limit the number of times a loan could be rolled over july. Wonga’s business design disintegrated.

On October 2nd 2014, the FCA announced that Wonga had entered as a requirement that is“voluntary under which it can make instant and far reaching modifications to its financing methods. Wonga’s web site explains just exactly what this may suggest for clients:

On conducting an evaluation into our past financing requirements, we recognised that individuals might not have constantly made the best financing choices, as well as on representation several of those loans might not have been affordable.

Consequently we’re applying a forbearance that is major for existing clients whoever loans wouldn’t normally happen made had they been at the mercy of this new affordability criteria introduced today. We’re working closely utilizing the FCA to concur this programme for those customers that are impacted. The FCA will supervise the changes to Wonga’s business model closely for approximately 330,000 customers who are in arrears of 30 days plus as at 2 October 2014, AND who would not have received a loan if presented under our new affordability criteria, we have agreed to write off all outstanding debt Approximately 45,000 customers who are in arrears of up to 29 days as at 2 October 2014, AND who would not have received a loan if presented under our new affordability criteria, will be asked to repay their debt without interest and charges, over an extended period of four months. Sigue leyendo