An article in the Times this week about personal loans highlights how banks and other lenders seem to be fighting to offer the worst loan deals at the moment - in a potential bid to curb demand. Despite gargantuan cuts in the base rate recently, a cheap loan is becoming harder to find than a new Christmas number one for Cliff. Here’s an extract:

The cheapest loan available is now 8.2 per cent – that is more than four times the base rate at 2 per cent. Experts say that providers may actually be trying to price themselves out of the market as the availability of credit continues to be squeezed.

Several providers have increased personal loan rates in the past four weeks – including Barclaycard by 2 per cent, Sainsbury’s Finance by 1 per cent, and Britannia building society and Lombard Direct by 0.5 per cent.

At the same time cheap bank loans are vanishing, the number of lenders who are willing to help out is also shrinking:

Lending on personal loans dropped by 26 per cent in October in comparison to the same month last year, according to uSwitch.com. Whilst six months ago borrowers could get rates of 7 per cent or less, all of these deals have now disappeared. Moneyback Bank, which consistently offered loans as low as 5.5 per cent over the past two years, has closed for new business completely.

Last year almost 1.3 million people took out an unsecured personal loan to consolidate debts – but with interest rates rising and credit being harder to obtain, less borrowers will have that option.

If you’re having trouble finding a cheap loan, or any loan at all, now might be the perfect time to try a short-term Wonga cash advance. You will need to pass our online credit check but, unlike the banks, we lend cash to tide you over for up to 30 days, so we’re not looking to predict your reliability over several years. You also won’t be left making repayments for years either of course!

Only a Wonga cash advance is a truly fast loan. ‘Well you would say that’ we hear you cry! But it pays to understand the difference between Wonga and other pretenders to the fast loan throne.

Wonga is not the only website claiming to offer people fast loans at the moment, but sometimes claims can be deceptive. We like to keep abreast of what’s going on outside of Wonga Towers and we like to know what kind of competition we’re up against. So we regularly try out some of the other websites for ourselves and it’s amazing how often boasts about ’same day loans’, ‘loans within an hour’ and ‘instant loans’ turn out to be pie in the sky!

Indeed, there have been occasions when our testers have been waiting for several days for a loan they applied for online - about as much use as a chocolate tea pot if they had genuinely been in need of emergency cash for an unforeseen expense.

So next time you want to tackle an urgent cash flow problem with a fast, short-term loan, trust Wonga to deliver. We’ve talked about some of the other reasons we’re different on this blog before, but speed is undoubtably our main strength if you need urgent funds. We’re the Usain Bolt of the consumer credit world and we’re here to help you in a flash for those ‘Wonga moments‘ when time is everything. If your application is approved we’ll deposit the cash within an hour (usually minutes), no matter who you bank with, what time it is, or what day it is. Now that’s a fast loan! As for the others, don’t always believe the hype!

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!

Your credit history can be a big factor in the cost of borrowing. Like a school report, good behaviour is rewarded, but if you don’t play by the rules it’ll be noted by the credit bureaus and your grades will suffer!

Lenders may penalise you with higher interest rates, or refuse to lend you anything as a result of a poor credit rating, although it’s worth noting that many banks will be looking to assess your potential profitability as much as any risk of non-payment!

Your credit history looks at current debt, bill payment and a number of other factors. It may seem strange, but not using credit can be as bad for you as behaving badly with it. Lenders are looking to rate your reliability in the past, so if you’ve not yet proven you can be trusted you’ll be classed as higher risk.

Using Wonga.com can actually help improve your credit rating - and fast. This should never be the sole reason for applying for a cash advance of course, but it’s a very useful bonus and could mean better deals from potential long-term lenders in the future.  

Wonga is good for your credit rating because we carry out a credit check as part of our sophisticated decision process. When you take a short term loan from Wonga we create a SHARE account, which is a way for lenders to see the past behaviour of potential customers with other companies. Thanks to our hi-tech systems we update this information very rapidy with good news, everytime you repay a cash advance on time.

It means other potential lenders, such as mortgage providers, banks and credit card companies, get almost instant visibility of your trustworthy use of our service. Anecdotal evidence from testers and customers suggests it’s a very quick way of improving your ‘FICO‘ score, which is a rather mysterious rating used by some credit bureaus and can play a deciding role in applications with some lenders.

The FSA recently launched a new financial advice site aimed at the yoof, or ‘young adults’ as they put it. To be more specific, people who are lucky enough to be aged 18 to 24. It’s called What About Money.

These people may be in the prime of their life, but it can be a tricky time financially. Cash can be tight because you’re only just starting out on the career ladder and you might not have too much experience of borrowing either.

The site offers bags of independent advice about different products and also a forum where members can discuss queries, concerns or experiences. It’s certainly worth checking out if you’re in need of credit but want some guidance before jumping into the huge and complex world of loans.

With traditional, long-term loans it can often be a case of ‘borrow in haste and repent at leisure,’ because you’re tied in for years, so do your research before committing to any form of credit. Wonga’s website offers borrowing and debt advice.

When we open our doors to the first Wonga customers in the coming weeks, we’ll not be the first company in the land to offer small, short term loans. But we’ll certainly be doing it with a difference.

There’s been some murmerings in the press of ‘payday’ loan companies from America offering month-long loans which come with a fixed fee per £100 borrowed. Sometimes up to £30 or more.

But that’s way too rigid for Wonga. We’ll be the limbo dancer of the small loan world, thanks to our startling flexibility. Not only will you be able to choose exactly how much cash you want to borrow - literally down to the last quid - but also the exact number of the days you need it for (between five and thirty).

That way you also control the cost of the loan, which we’ll show you before you apply. Why borrow £100 for month if you only need £75 for two weeks? Prepare for short term loans YOU control.

Wonga will soon be offering short term loans more conveniently and flexibly than other online lenders. They won’t be cheap loans - interest will be charged at 1% a day - but you will only borrow cash for between five and thirty days. And that’s a crucial point. It’s a short term loan you pay back on a date that suits.

Not only that but, unlike most short term loans, you’ll also be able to choose exactly how much you want to borrow, down to the last pound. As you make that decision, we’ll tell you how much the loan will cost you before you apply. For example, borrow £100 for ten days and it’ll cost you a tenner - £1 per £100 borrowed per day.

Sound fair? We think transparency and flexibility are vital and people are then bright enough to check out the cost of the loan and make a decision whether to go for it or not. What we’re not so sure about is the fact we’ll still have to publish the official ‘APR‘ on the site. It’s currently law for all loans in the UK, but is a theoretical calculation of how much a five or thirty-day loan would cost if taken for a year really helpful to consumers? We think this excellent cartoon from a leading US short-term lender makes a great point!

After a six-month delay, it looks like fast cash transfers between bank accounts, known as Faster Payments (FP), should be available from the end of May. It’s the beginning of the end for the Bemuda Triangle of the banking world.

Until then, everytime you move money between different accounts the cash ends up hovering between banks for three days - a ‘clearance’ delay. The only way to transfer cash the same day is through the Clearing House Automated Payments System or CHAPs. This costs a lot of money for individuals and is really aimed at businesses-to-business transfers. And even CHAPs has limitations, with a cut-off point each afternoon for same-day cash transfers and no service during weekends and bank holidays.

So the arrival of FP will not only mean faster cash transfers for you and I, but will also allow Wonga to pay loans to customers within minutes - no matter what day of the week or time of day it is. The only downside to FP is that not all banks and building societies will be taking part to begin with and you’ll need to be with a participating bank to make use of the scheme. Thirteen of them have signed up so far, with most of the major ones included, but hopefully it will become available to everyone in the not too distant future.

Woohoo! Our plans for a new take on short-term lending have been commended by business experts once more. The entrepreneurial gurus at Startups.co.uk have placed Wonga in their Startups 100 list for 2008… In the top 20 actually! At this rate our highly buffed trophy cabinet will be groaning with silverware before we’ve even decided where to hang it. Many thanks guys - we’re thrilled to be acknowledged as one of the most exciting new business in Blighty right now.

Here’s a brief extract from their press release, which explains more: Startups 100 lists the most exciting and innovative emerging small companies predicted to become the big businesses of tomorrow. Companies were assessed on originality of concept; strength of business model; turnover; evidence of future revenues; proposition to investors; quality of management; and potential to disrupt existing markets.

“Web 2.0 start-ups bidding to become the next big internet super-brand featured prominently, while green and social enterprises also occupied a strong hold in a diverse line-up of businesses.”

Wow, we’ve done it! We’ve been named amongst the top 100 most exciting new tech companies in Europe by Red Herring! It’s our first ever award – the first of many we hope – and testament to all the hard work and new thinking that’s gone into creating the slickest short-term lender on the block.