Wonga has collapsed into administration, putting 500 jobs at risk, hours after announcing it would no longer be taking applications for new loans.
In a statement, the payday lender said that having assessed all options, the board "concluded that it is appropriate to place the businesses into administration".
It added: "Wonga customers can continue to use Wonga services to manage their existing loans but the UK business will not be accepting any new loan applications. Customers can find further information on the website."
Corporate undertakers at Grant Thornton have been appointed to carry out the administration of one of Britain’s most controversial loans companies.
Hours earlier a statement appeared on Wonga's website informing hopeful borrowers the company would no longer be taking applications for new loans, however it said existing customers can "continue to use our services to manage your loan.”
On Wednesday the firm held emergency talks with the Financial Conduct Authority to discuss what effect administration would have on existing customers.
The company says that despite the collapse, existing customers, thought to total around 220,000, are still required to repay any outstanding money.
The company had been struggling due to a “significant” increase industry-wide in people making claims in relation to historic loans and shareholders pumped in £10 million in a bid to save it from going bust.
Investors in Wonga include Balderton Capital, Accel Partners, Greylock Partners and 83North.
On Sunday, Wonga said the number of complaints related to UK loans taken out before 2014 had “accelerated further”.
“Against this claims backdrop, the Wonga board continues to assess all options regarding the future of the group and all of its entities,” the company said at the time.
In 2014, the firm introduced a new management team and wrote off £220 million of debt belonging to 330,000 customers after admitting making loans to people who could not afford to repay them.
In the same year, the FCA said it would bring in stricter affordability checks to the industry and introduce a cap on the cost of payday loans on the amount borrowed per day.