Wonga caps loans at FCA's maximum rate
Wonga has reduced the interest on its payday loans to 0.8%, the maximum rate of interest allowed by the FCA.
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Additionally, the lender has cut its missed payment fee from £20 to £15 (also the maximum permissible amount) a £5.50 transmission fee has been removed, and the minimum amount that can be borrowed has increased from £1 to £50.
The FCA announced the new price cap structure last month, which will come into effect from the 2nd January. Under the new rules, borrowers will never need to pay back more than twice what they borrowed. 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.”
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