Wonga, the fastest personal loan you can get

It’s a week until payday at your job, the rent and bills are due, and you don’t have the cash. What do you do? Wonga, which has just raised $6 million from Balderton Capital, wants you to come to them .

Based in the UK, Wonga has yet to launch. But when it does, it will offer nearly instantaneous loans ranging from £200-1000 (about $400-2000). The time between application and deposit is around 20 minutes, which is remarkable.

This is just the latest in a string of investments in companies seeking to cut banks out of the small personal loans business. U.S.-based person-to-person lending companies Prosper and LendingClub have similar goals. (See our recent coverage here )

Wonga requires you have to have a decent credit record and not be in debt. For a flat fee of £25 plus one percent interest a month (a 13.8% APR), you can get a first loan up of to £200. Wonga has a “trust rating” system that allows responsible borrowers to take increasingly bigger loans, so when you pay back your first £200, you can take 400 in the future, and if you pay that £400 on time, you can borrow £600, and so on up to £1000.

Balderton Capital, which used to be the European wing of Benchmark Capital before recently splitting off, has also invested in the UK’s person-to-person lending company Zopa (see coverage here ). The potential conflicts continue: Benchmark U.S. has also just poured $20 million more into Prosper, even though it has a stake in Zopa, as well. The casual observer begins to wonder whether these two firms have become competitors in this area since splitting. CircleLending is yet another player which, like Wonga, is not a social network.

Wonga only operates in the UK, where companies like EZCashLoan, PayDayLoansUK, and a whole list of others offer same-day loans.. Some of these companies don’t check credit and most will give you a loan even if you are already in debt. None can get you your money in less than half an hour.

To offer its loans, Wonga does not draw on money from a bank; its risk is underwritten by an undisclosed partner. The $6 million will go towards expanding its operations and building out its infrastructure.