There are many reasons why a Wonga loan is different to a traditional loan, but perhaps the most fundamental point is that we make money when customers repay their cash advance. ‘So what?’ you might think, ‘Surely that’s normal.’ But in the world of unsecured personal loans and credit cards there’s a cast iron rule that usually goes unspoken… They generally make money by keeping customers in debt for as long as possible!

In an industry where new customers are won on low headline interest rates, cash is often made by other means. These tactics include long repayment periods, fixed terms and penalty charges.  

Even in these uncertain times of soaring inflation, nationalised banks and restricted lending, many rules of traditional credit still apply. Indeed, while there has been unimaginable turmoil in banking, true innovation in the way services are offered to consumers remains a rare thing. The credit industry is such an ancient one that in times of trouble it’s common for lenders to become even more cautious and rigid.

The best advice is to make sure you fully understand the terms of any form of credit agreement before taking the plunge. Always read the small print and, in the case of personal loans, check for early repayment clauses. Otherwise you could find yourself handcuffed to your debt for longer than necessary.

Or you could visit Wonga.com instead! At Wonga we have no desire to keep you in debt and the entire service is geared towards helping you manage your cash flow with short-term credit - on the odd occasion when unexpected expenses strike. You can choose exactly how much cash you need and exactly how long you want it for. That means you’re in control and you settle the debt quickly. 

Our commitment to responsible lending also means you won’t find any hidden charges even if you decide to repay your loan early. We will actually welcome it!

This entry was posted on Tuesday, October 14th, 2008 at 11:42 am and is filed under Credit, Credit crunch, Debt, General, Loans, Responsible borrowing.