£200 Loan | Compare Best £200 Lenders Now!
There is always some emergency that pops up mid-month that throws your budget through the window. It could be a broken boiler, or your car will not start. It happens to everyone, so do not beat yourself up. In such times, a £200 loan comes in handy in covering unexpected costs before your next payday.
And luckily, with most lenders, you can apply for a £200 short term loan online and have the money on the same day. But before you jump on the opportunity, take a step back to learn the ins and outs of £200 short term loans.
In this guide, we shall cover how the £200 quick loans work, the types available, how you can repay the loan, the APR, and everything in-between.
Best £200 Loan Direct Lenders 2020
What is a £200 Quick Loan?
A £200 loan is a short term loan designed for emergencies. Different financial institutions offer these loans but with varying rules and regulations. With traditional financial institutions, for instance, you can get the loan only if you have a good credit score. But what happens if you don’t? Well, then direct loan lenders swoop in to save the day.
How £200 loans work
These loans are convenient and easily accessible. The first step in getting a £200 emergency loan is finding the best lender to work with. Like in most industries, short term loan lenders have different charges, and customer support varies. Because of this, you must spend some time reviewing the lender before you apply for the loan.
Once you find a lender that checks out, the next step filling an loan application form. At this point, you have two options; to fill an online form or apply at a store location. Usually, top short term loan lenders have store locations but they are limited, and borrowers prefer online applications.
Depending on the lender, visiting a store location comes with added advantages, including the luxury of negotiating loan interest and payment plans. With online applications, you almost always have to incur the specified interest.
After applying, the lender reviews the loan and either approves or rejects it. The review process takes about 15 minutes. During the review, the lender conducts a soft check. They verify the details you provide and determine your loan affordability based on your income and expenses.
Upon approval, you’ll receive a loan agreement. The agreement contains information about the £200 quick loan, including the APR, the repayment date, installments, and collateral (if any). When you sign the agreement, you commit yourself to make timely repayments.
The last step involves the lender transferring funds into your account. Depending on your preferred method of payment, you’ll have the money within a business day.
When is the £200 loan due?
As a short term loan, the maximum loan term is 12 months. But this varies from lender to lender. Some lenders will require repayment within 30 days and others within six months. Though long term repayments offer more breathing space, it also translates to higher loan costs.
This information is captured before signing the loan agreement. If you don’t repay the loan on the specified date, the lender will charge a lateness fee. On the flip side, if business is good and you can afford to repay before the deadline, make the payment. But read the fine loan print to ensure there are no early repayment penalties.
But why would they ‘penalise’ early repayment? Shouldn’t they encourage it instead? Again, it all depends on your lender. Some are happy with early repayments while others frown upon them because they translate into lost income. £200 loan interest is represented as an annual percentage, e.g., 292% pa, but it’s charged per day. So to recover the ‘lost’ income, the lender charges a flat fee for early repayment. And though you still get to save some money, you are better off working with a lender that doesn’t charge.
How much does a £200 quick loan cost?
£200 short term loans are convenient and saviors during financial emergencies. Unfortunately, this convenience doesn’t come cheap. But does convenience alone doesn’t justify the high cost? No, Most lenders offer loans to borrowers with poor credit scores (usually below 620). For the high financial risk they undertake, they need an equally high reward. Because of this, short term loans end up being over 5x more expensive than traditional loans.
The good news is that the FCA regulates the cost of these loans. This means that lenders cannot surpass a set limit in terms of default fees and interest rates. The maximum short term loan interest for a month is 24%. So for a quick £200 loan you’ll repay a maximum of £48. If you take the loan for a longer period, the cost will be higher. In case you miss the repayment deadline, the maximum fee you can pay is £15.
Now, there is a difference between the interest rate and the APR. Most lenders display these two figures on their website. Many borrowers take note of the interest rate and use it to determine how much they will repay and disregard the hidden costs. These hidden costs are covered by the APR meaning this percentage is a true representation of the loan cost.
To get a £200 payday loan, you will have to provide the lender with a postdated check or a CPA to withdraw cash directly from your credit union, bank, or the prepaid card account. In some cases, lenders encourage borrowers to return to their store locations for their loan repayment. Though it might be an inconvenience, you can rollover the loan or work out a favorable repayment plan.
If you do not return to the store, the lender will be forced to repay the loan through the CPA or cash in the check on the due date. A CPA is an authorization of the lender to set up repayment from your bank account. This authorization does not provide the lender with personal information, and it is safe. Banks monitor the payments closely and have security measures. But if you are still not comfortable with the arrangement, you can withdraw the permission and make manual payments instead.
Consequences of a £200 loan default
Before a lender can conclude you’ve defaulted on the loan, they go through a series of steps. First, they send you a message alerting you of the payment that is due in a few days. On the due date, the lender will try to process the repayment. If you do not have sufficient funds, and you don’t have an overdraft agreement with the bank, the payment doesn’t go through. In which case, the bank will charge a fee.
The lender will try making the payment several times, and each time the response is ‘insufficient funds’, the bank charges you. This process increases the cost of the loan. On the flip side, if the bank allows an overdraft, the payment will go through. However, you will incur overdraft charges.
After several failed repayment attempts, the lender will try getting in touch with you, your family, and close friends. If the process doesn’t bear fruit, they’ll forward your name to debt collectors.
If the due date is drawing closer and won’t meet the deadline, then you should contact the lender’s customer support. Inform them of your situation and work out a payment plan. In most cases, the lender will rollover your payments to the next payday, albeit a rollover fee.
Applying for a £200 Loan
The application options include an online form or by visiting a store location (for the few lenders who have physical locations). You can access the online form through the official website or an application.
When reviewing loan applications, most lenders don’t conduct hard credit checks. As such, borrowers with poor credit can get the £200 loan as well. In the application form, you’ll provide your details, including your physical address, bank account details, employment, and expenditure. This information is used to determine loan affordability.
Are you eligible for a £200 loan?
With most lenders offering bad credit loans, it might be tempting to think that they approve all loans. But this cannot be further from the truth. Borrowers who cannot afford the loan get their loans rejected. For lenders, the financial risk is already high. It doesn’t make sense to increase the risk by offering loans to borrowers who will struggle to repay the loan.
Aside from this, lenders consider several factors before they review the loan application. These factors include:
- Your age – you should be above 18 years
- Your residency – you should be a UK resident
- Bank account – you need a UK bank account
- Income – your income should be regular (be it from formal employment or other sources)
In addition to the above;
- You should provide the lender with proof of your residency in the past three years
- Provide a working mobile number and an email address
- Agree to a credit and affordability check
Types of £200 loans
There are different types of £200 short term loans. They all fall under two broad categories:
- Secured loans – these loans require collateral from the borrower like a car, a house, or business. You can get even more than £200 and get longer loan terms.
- Unsecured loans – they do not require collateral. They are ideal when you want to borrow only £200. They usually have shorter loan terms.
The unsecured loans are further broken down into different types, including short term loans, personal loans, payday loans, and more. Below are brief descriptions of each type.
£200 payday loans
These loans have high costs because of their convenience and financial risk. They are often repaid on the next payday. Bear in mind that the longer you take to repay this loan, the more it will cost.
£200 doorstep loans
These are regular short term loans. The only difference is that after application review and approval of the loan, the lender delivers the cash to your doorstep. These loans improve the convenience of £200 short term loans.
£200 instalment loans
You can repay the £200 loan in a lump sum or instalments. If you take a £200 loan for four weeks, you will pay it back every week. This mode is more relaxed than paying back in a lump sum.
Moreover, you get to reduce the loan cost since the interest is charged on the reducing balance.
£200 loan direct lender
There are two kinds of loan lenders: brokers and direct loan lenders. With direct loan lenders, you get to deal with the lending company. The application, loan review, and approval are all handled by the lender. On the flip side, with broker firms, you submit an application which they later distribute to lenders in your region. If you get loan approval, they charge a commission and remove themselves from the equation.
With direct loan lenders, you can either have payday loans or instalment loans. The application is simple and tasks minimal time.
£200 instant loan approval
There are times you’ll need the £200 urgently and times you can wait a little longer. In cases where time is of the essence, instant approval loans come in handy. Now, you might be tempted to think that these loans are approved immediately, but they are not. But, in comparison to traditional loan options, the approval process is fast and almost instantaneous. You can use the loan to clear a hospital bill or repair your car.
£200 bad credit loans
Every person who has a credit card has a file with a credit bureau. This means that they have a credit score, which reflects on their ability to repay loans on time. The credit scores range between 300 and 850. And though there are different types of credit score systems, the most common one defines scores below 620 as poor credit scores. With such credit scores, you come with high financial risks and no traditional financial institutions will help you. Only short-term loan lenders with high APR will consider it. And with these lenders, no credit score is too bad to handle.
£200 bank overdraft
Think of a bank overdraft as an agreement to withdraw more money than you have in your account. When you run short of cash, you can withdraw extra money up to a predetermined limit. For instance, if you have £500 and need £700, you can take the £200 as an overdraft.
If the ban is aware of this agreement in writing, then the overdraft is called an authorized overdraft, but if it’s not, it’s called an unauthorized overdraft. The latter is costlier than the former. A bank overdraft also comes in handy when you don’t have money to repay your short term loan on time.
£200 revolving credit
This is similar to an overdraft but different from a line of credit. With revolving credit, you have a set limit (in this case £200), and pay interest (cheaper than an overdraft). It differs from a line of credit because it is recurrent. The limit is in play until you end the agreement. With a line of credit, once you hit the limit, the agreement ends.
£200 no credit check loan
With this loan, the lender doesn’t check your credit score with financial bureaus. They only determine affordability. This loan type is great for individuals with poor credit scores. This loan has the potential to bury you in debt if you default.
Tips to Choosing a £200 Loan Lender
Lenders offering £200 loans are in plenty in the UK. But before you get into any contract, do your due diligence. Choosing the wrong lender might leave you with a bad experience or ruin your credit score further. Below are some tips to consider when choosing a lender.
- Customer service – the availability and friendliness of the customer support affects your experience
- Interest rates – though the £200 loan is generally expensive, the lender should be within the FCA limits
- Reputation – only work with a lender that has good consumer reviews. Ask family and friends to refer you to lenders
- Loan term – it shouldn’t be too long or too short. Always work with a timeframe you know you’ll have the money ready.
- Eligibility – the requirements should not be strict.
- Features – do they have store locations? Do they allow early repayments? Do they support multiple payment methods?
- Fees – how much do you pay when you miss the deadline?
- Hidden charges – the lender should be upfront with the costs. Hiding costs will destabilize your budget further
Should I take a £200 Loan?
A short term loan is a double-edged sword. The outcome of the loan depends on what you use it for and if you can afford it. Before you get a £200 loan, ask yourself;
- Can I afford the repayments?
- What do I intend to use the £200 for? Can it wait?
- Do I qualify for cheaper loan options like a bank loan?
Pros and Cons of a £200 Short Term Loan
- Easy to apply – the loan application forms are step-by-step.
- Fast approval – you will have your money on the same day (assuming you complete the loan application during business hours)
- Multiple options – there are lots of lenders to choose from
- They are expensive – the £200 loan is expensive
- Too many con lenders – the internet is full of scammers. You need to be cautious and only work with lenders with licenses from reputable organizations
- Some loan information is missing – some lenders are not transparent with the loan costs
When you need a £200 short term loan fast, you can explore options including payday, auto title, and instalment loans. They come in handy for those with a poor credit score. But before settling on any option, read consumer reviews to get a feel of the company’s reputation. Only apply for the loan is you trust the lender.
Can I secure a £200 loan is I don’t have formal employment?Yes, you can. Some lenders do not care about your source of income provided it is regular. However, some require employment details and even have limitation son how much you should be earning before they approve the £200 loan. They do this to pass as responsible lenders.
Can I get a £200 loan without providing my bank account?Yes, you can. However, the options available are limited. Since most lenders work with banks, you stand a better chance of approval if you have a UK bank account.
Can I get an instant £200 loan?This is possible, especially if you find a lender that uses an algorithm to approve or reject loans. The algorithm works fast and completes the process in a matter of seconds. What may take long is transferring the £200 to your bank account.
What happens if I default on the £200 loan?Many circumstances can force you to default on a £200 loan. It could be your pay is delayed, or you get other financial emergencies. If you default, the lender might report you to a credit bureau or submit your name to debt collectors. Debt collectors are ruthless and highly aggressive in their collection methods. Before it gets to that, you should inform the lender of your financial situation.
Will I pay less if I repay the £200 loan in less than a month?If the interest rate is fixed, then if you repay before the deadline, it will not reflect on the cost of the loan. However, if the interest is flexible, you might save money. But before you do a happy dance, confirm if the lender charges for early repayment.
Latest News View all
If you’re looking for a low-cost share dealing platform that makes it super easy to buy and sell stocks, ETFs, and funds, it might be worth considering Halifax. You don’t need to have a current account with the provider, and getting started takes just minutes. In this article, we review the ins and outs of...
The United Kingdom’s high street banks approved close to a million mortgages in 2019. Data gathered by LearnBonds.com indicates that 982,286 mortgages were approved in 2019, an increase of 7.4% from 2018’s 909,597. The mortgage approval entails loans for home purchase, remortgaging and other loans. Compared to 2018, the number of mortgages approved for home...