One way of comparing the interest rates or potential cost of different loans is looking at the APR, or annual percentage rate. An APR is the amount you will pay in interest over a year, plus other charges. Many lenders advertise a 'representative APR', which means the lender has offered that rate to at least 51% of its customers.
APR is a useful measure for considering and comparing many traditional loans, where you're looking to understand the comparative value and cost over several years. But it’s not the only thing you should make your judgements on and you should always make sure you understand the actual cost - the total amount to repay - for any loan you're considering. There are also some circumstances – such as loans of less than a year – where APR is not a straightforward or clear comparison tool to use.
In the case of Wonga, we only provide loans of up to a month, whereas APR was designed to standardise the interest rates charged for loans of several years, or ongoing credit card balances. We provide the representative APR, but we also believe the most useful information for a short term cash advance of this kind is the total cost of the cash you want to borrow. So we provide all the information as clearly as possible and trust you to make your own judgement about what's good value and how much is worth paying. After all, no-one else provides such a fast, convenient and flexible service as we do!
If you consider the APR on a Wonga cash advance actually goes up as the term - and therefore the cost - comes down, you might appreciate the potential for this measure to confuse!
Deciding to use Wonga to help sort out a short term cash flow problem is a bit like using a black cab to get from one side of town to the other... There are cheaper ways to do it (like getting the bus or walking), but in certain circumstances it makes perfect sense to pay a premium for a fast, dependable and secure service to get you from A to B.