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Wonga caps interest rates at FCAs maximum rate


Payday loan company Wonga have changed their loans cap and interest rates in line with the new regulations introduced by the Financial Conduct Authority (FCA).

The UKs leading payday loan company have decided to cap the interest rate on their loans at 0.8%, which is the maximum rate of interest allowed by the FCA. They have cut their missed payment fee from £20 to £15, which is also the maximum they are now allowed to charge, and have removed a £5.50 transmission fee.

The minimum amount which a consumer can borrow from Wonga has been changed from £1 to £15, which is in line with the new guidelines.
The new FCA regulations will come into effect on 2nd January, and borrowers will never have to pay back more than double their original loan. In addition, someone taking out a typical loan over 30 days and repaying on time will not pay more than £24 per £100 borrowed.

Wonga UK chief executive Tara Kneafsey said:

“We’re pleased to offer our customers a cap-compliant product ahead of the FCA’s January deadline. This and all the changes we’re making at Wonga reflect our commitment to provide short-term lending to the right customers in a responsible and transparent way.”

In October this year, Wonga was forced to write off 33,000 loans as they had not properly checked their customer’s ability to repay. They have had to offer compensation to customers for sending out threatening letters from non existent law firms.

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