The collapse of Wonga and how it will affect those with loans

Figures in 2016 showed that 42% of millennials have turned to an alternative form of finance at some point, and the rise of payday loans has been well documented since the crash of 2008.  Whatever your feelings on pay day loans, the collapse of Wonga has left those with outstanding loans unsure of where they stand.

If you have an outstanding Wonga loan

Even though the company is going into administration you are still legally obliged to continue with repayments, and consequences of defaulting on the loan remain the same.  Do not be tempted to stop payments on the theory that it will not be followed up on.

The loan may well be sold on to another company, but they will not have the right to change the terms and conditions of a loan. For example, they can’t increase the interest or demand earlier repayment. However, a buyer of Wonga’s existing loans may take a more or less assertive approach to recovery, so it is important to keep on top of any debt.

Advice to Arro Money customers

Arro Money does not offer any form of credit, but we would always recommend our customers keep up with any debt repayments and bill payments in order to prevent further action from credit companies and avoid a negative impact on your credit record.