Short term or “payday” loans are designed to help cover occasional unexpected shortfalls in cash, perhaps fixing an essential home appliance or paying a vet’s bill. If you need to borrow £200 for a short period of time, a short term loan is one way to bridge the gap but there may be cheaper alternatives. And if you’re having debt problems, Money Helper is a good place to find support.
If your application for a short term loan is accepted, funds can usually be transferred to you within a day. The amounts on offer are generally smaller, and rates higher, than those provided by banks. The loans also generally come with much shorter repayment periods as they’re designed to be a short term helping hand, not a long term solution.
Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk.
Please note: High-cost short-term credit is unsuitable for sustained borrowing over long periods and would be expensive as a means of longer-term borrowing.
Payday/short term loans are a very expensive method of borrowing and are not a good idea for borrowing over longer periods, or for sustained borrowing. They may not solve your money problems.
Before you apply for a payday or short term loan, make sure you’ve considered other options. Is the expenditure that you’re planning absolutely essential? If you can defer a purchase then you could save yourself money in the long run. If you’re struggling to pay a bill, then why not talk to your electricity, gas, phone or water provider to see if you can work out a payment plan? Read more about alternatives to payday loans at moneyadviceservice.org.uk.
As you may have already guessed from the name, short term loans are really only a short term option. They’re designed for when unexpected costs arise that you’re unable to afford. They are not a solution for longer term financial issues and should be paid off as soon as possible.
Before applying for a £200 loan you need to be certain you can meet the repayments. You’ll also need to meet the following criteria:
Meeting these requirements doesn’t guarantee you’ll be able to take out a £200 loan – only that you will be considered.
CPA differs from direct debit because they give the company being paid the ability to withdraw money from your account whenever they wish, and to take payments of different amounts without consulting you. Most payday loan companies will use CPA to collect your repayments, however you can cancel this at any point by either consulting with your provider or your bank.
Browse our collection of payday loan guides, designed to answer all of your short term loan questions and help you find the right payday loan.
What’s the difference between a continuous payment authority, a direct debit and a standing order?
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