Wonga, Britain’s largest payday lender is getting a lot of bad press at the moment. Good. According to Wonga’s own website (as at 12/11/2014), the interest they charge on a representative loan of £150 over 18 days is 365%. This equates to an APR (annual percentage rate) of 5853%. I read in The Week (my favourite weekly news digest) that:
“Borrowing £400 from Wonga at its standard rate for seven years would leave you owing more than Britain’s national debt.”
This Week Issue 990
The financial authorities have finally stepped in to call time on the money lenders. By January 2015, the interest rate on payday loans will be limited to 0.8% per day and they will be a fairer cap on penalties for late payment. And about time too. Let’s hope that these legalised loan sharks preying on the poor and the desperate (and sometimes the feckless) will soon go the way of the dodo – and that investors will lose their Saville Row shirts. Now, what to do about the fat cat tax cheats stashing away their shillings in the Cayman Islands?