Wonga to try out 90-day loans
They're going to start testing a 90-day loan, so people can spread costs out over longer periods, and the idea is that there'll be greater flexibility too. They need to do something to win people back to their business, as in April, they announced a loss of over £37 million.
For the trial, only existing customers will be allowed to apply for these new loans. Those that do, will be able to on the same terms as the existing product, paying interest of 0.8% - or 80p per £100 borrowed - per day.
A Wonga spokesman said: "We can confirm that we are planning to launch a pilot of a more flexible, three-month instalment loan to existing customers this week."
The lender is still wrestling with a lot of mither at the moment, as they are still going through a process of authorisation by the FCA. They have been operating under interim licences since 2014. The FCA aren't messing around though, and have said that they think the majority of payday loan companies are going to go out of business, since they introduced a cap on loans and repayment fees.
Can Wonga pull out of all this? Doesn't look likely.
There's been job losses at the company, with chairman Andy Haste saying: "Our focus is on creating a business that meets the demand for short-term credit sustainably and responsibly, resulting in good customer outcomes. However, Wonga can no longer sustain its high cost base which must be significantly reduced to reflect our evolving business and market. Regrettably, this means we've had to take tough but necessary decisions about the size of our workforce."