Wonga is the payday loan king, famed for their flexible loans that many people are familiar with through their mainstream TV ads. This has been a controversial lender that has faced troubled times, but their early innovation and market profile has to be admired. In this comparison we have faced them off with 4 worthy high flying competitors in the subprime loan sector. These are Cash Asap, QuickQuid, SafetyNet Credit and WageDayAdvance.
We’ll begin taking a look back at the beginnings and rise to fame of this subprime giant, as well as addressing the ins and outs of their service. Wonga’s story began back in the year 2007 and so they have recently hit that critical 10 year milestone. The founder was Errol Damelin who was intent on making this project stand out in what was at the time a rapidly growing market online. They didn’t have the budget back then to invest in major ad campaigns and so innovation was required in those early days to truly make their mark. The approach taken was to deliver a more fast and flexible route to funding.
If we take a step back to the early roots of the industry, it was the year 2003 when the first web-only payday lenders started popping up. retail had kick-started much earlier noting The Money Shop’s first store that opened in Nottingham in 1996. Of the first web dedicated brands, it was PaydayUK who would soon become the major force. They and their rivals however offered simplified monthly-only products. It would take a while to get up and running, but soon enough www.wonga.com would become the primary destination for borrowers who had short term borrowing needs. A customer could for the first time choose their exact repayment day here (rather than pay for a full month).
Any amount to the £1 could be selected between £1 and £400 by new users with £1000 being available once trust had been demonstrated. Flexible amounts like this were rare, with most rivals requiring at least £80 or £100 to be requested. Wonga’s service was also very speedy with promises of an instant decision and a 15 minute payment, guaranteed. When you also factor in 24/7 customer support, it was unsurprising that this lender had become the first choice for many. Big profits were earned and there was heavy reinvestment in radio & TV ads, as well as football kit sponsorships (Blackpool, Hearts and Newcastle). As they become bigger, the cracks did begin to appear.
Mistakes would hand the firm with expensive fines and loan write-offs, but price capping was the big elephant in the room. Problems would magnify and across 2015 they took on a huge loss after tax of £76.5 million. Big changes had to come and this is exactly what we have seen through more responsible lending (Wongability scheme), staffing changes and sales of the Group’s other ventures (BillPay and Everline). They also pulled out of Canada (the brand remains active in Poland, South Africa and Spain). The service has changed a lot also, noting their Flexi Loan (3 and 6 month terms), new amount options (£50-£600 with £2000 on reloans) and 24/7 support was cut back.
For this submission we have handpicked Vanquis Bank who are an established provider of subprime credit cards in the UK. This thriving Bradford-based business will be compared against 4 other big hitters competing in this in demand niche where solutions are put forward to the many turned away from mainstream lenders. This featured firm will be compared against Aqua, Barclaycard, Capital One and Tesco Bank. We’ll firstly introduce each.
Our featured specialist provider issued their very first card back in May 2003. They have progressed well as time has passed, taking the approach of supplementing their core brand with other competing trading names and various partners who are brought in on an affinity scheme (the most high profile partner of course being Argos). Many people will be familiar with the owner Provident Financial Plc who can boast a rich history dating way back to the year 1880. Current active brands include Provident who are the market leading doorstep loan service. The online alternative to this is Satsuma Loans and they also provide car finance through Moneybarn.
They had also ventured into the guarantor loan sector through Glo, but this project has ceased trading. The Group has 2.5 million customers overall. Of which, the largest share of 1.6 million customers belong with Vanquis. Over their history they have accepted more than 3 million people, with around half of these being active. There are as noted other trading names where they operate from that includes Aquis, Chrome, NEO and Origin. Original was another project that has now been closed. Partners who they issue cards for include Argos, Black Diamond, Granite and XYLO. There are few differences across either option. In general, you’ll see price matching at 39.9% APR.
Sometimes the rates go higher and occasionally they drop lower. Chrome currently boasts the cheapest starting rate of 29.5%, Aquis follows at 29.8% and the partner Granite sees 34.9%. It is important to highlight that the rates are always variable and so you could see a rate hike no matter where you apply. The standard Vanquis credit card (aka Visa) has a starting limit of £150 to £1000 with this potentially rising to £4000. Its purchase range is 39.94% to 69.94%. Things have always been a little confusing on the login front. On the main site they link out to www.evanquis.co.uk and www.payvanquis.co.uk. The EVanquis site then links out to www.evanquis.com that is the main portal.
PayVanquis is differentiated through payments only without the need to register. People are targeted with poor credit such as CCJs and those discharged from bankruptcy. There are also pages for low wages, new to the UK etc. They are however pretty vague with specifics on their Visa offering, but have always been known for high acceptances rates. You will of course pay a high price and will likely start on a modest starting limit. This is however a good opportunity to get back on track enabling you to rebuild your rating. Support runs Mon/Fri (8am-8pm), Sat (9am-5.30pm). Before jumping into the comparisons, we’ll firstly investigate the best Vanquis alternatives (alphabetically sorted).