Online credit start-up Wonga has launched a mobile app that offers instant short-term loans over the iPhone to approved applicants. The company says the new app will turn the touch-screen device into a “virtual cash machine” for urgent or unexpected expenses.
First-time customers can download the app for free and must fill in a four-page application form on their mobile before being considered for a loan, according to Finextra. Users can apply for credit up to a maximum of £1000, with funds transferred to the successful applicant’s bank account within 15 minutes.
Errol Damelin, Wonga founder and CEO, says: “Our vision has always been to provide UK consumers with a fast, convenient and short-term way to solve immediate cash flow problems. While automating the lending process in a responsible way was a big challenge, our technology now enables us to develop a range of products which do just that.”
The company has courted controversy over its repayment terms, which are calculated at a massive APR of 2698%. Wonga has sought to deflect criticism by pointing out that the facility is intended solely as a short-term cash advance up to a maximum of 31 days, with interest charged at one per cent a day.
The company’s web service was given its full market launch in July 2008 and it claims to have already processed nearly three-quarters of a million applications using a real-time risk and decisioning platform.
Damelin continues: “We have made this app available as a free download from the Apple Store and, although it’s just as easy and quick to use as our existing web service, our unique technology will ensure we continue to make responsible lending decisions.”
The reassurances have not entirely satisfied consumer groups. Joanna Elson, from the Money Advice Trust, says: “We would urge the regulatory authorities to look carefully at the detail of this product, because we have concerns as to whether a person can be comprehensively assessed for credit using this service.”