Nobody likes the idea of borrowing money, but life has a strange habit of putting people into strange financial emergencies. More often than not, these situations are easily solvable, but what happens once all other financial and loan options have been exhausted?
That’s where $500 personal loans come into play, and securing them has never been easier, even for those with a few spots and smudges on their credit report.
Top Types of $500 Personal Loans
There are different types of $500 personal loans, and many of them are viable financing options for customers whose credit scores aren’t necessarily stellar. Here are the different types of $500 personal loans:
$500 Payday Loans
Payday loans, also known as cash advances, are personal short-term, small-dollar loans that grant borrowers a small lump sum based on the promise of repaying the loan within two to four weeks, based on their next payday. Since they aren’t secured by any collateral and are usually requested by high-risk borrowers, payday loans often come with exorbitantly high interest rates.
The annual percentage rates on these loans, which include interest, origination fees, and additional costs to the loan, are high and can go up to 350% or even more. While a loan of $500 doesn’t seem like much, you might end up having to pay back as much as $645, assuming that the repayment term is in four weeks.
If you happen to default on your loan, the borrower can choose to extend your loan and charge a late fee, which incurs more debt, which is why it’s advisable to exercise caution when taking out a payday loan.
$500 Bad Credit Loans
Bad credit loans, often marketed as no credit check loans, are a type of loan that doesn’t imply a credit check since they don’t use your credit score and credit history as an eligibility requirement.
That’s not to say that the lenders won’t inquire about your credit score; they’re likely to perform soft credit checks that won’t affect your credit score, and they’ll use your credit score to formulate the appropriate loan rates and repayment terms.
It’s worth noting that while they’re marketed as no-credit-check loans, these loans do have a minimum FICO score requirement. They’re typically aimed at borrowers whose FICO score ranges from 580 to 670, though some lenders may offer their products to borrowers whose FICO score is as low as 500.
$500 Car Title Loan
Car title loans are secured loans in which you obtain funds against the value of your vehicle in exchange for the title to the car. The loan amount is often derived from the value of the vehicle submitted as collateral and may exceed $500.
Given the fact that they’re secured by collateral, car title loans often come with more reasonable interest rates compared to those payday loans. Likewise, they don’t determine your eligibility based on your credit score, though car title lenders are still likely to inquire about the score to help them determine appropriate interest rates and repayment terms.
It’s worth noting that there are associated risks; if you happen to default on the loan, the lender might choose to repossess your vehicle to recover their money. In most cases, they’ll be happy to extend your loan, but the risk of losing your property if you default is real.
Can You Get a $500 Personal Loan?
Obtaining a $500 personal loan from traditional financial institutions isn’t as easy as it might seem because banks and credit unions don’t typically offer small loans. After all, the cost of administering the loan exceeds any possible profits.
However, there are several ways of securing a $500 personal loan, and they mostly involve payday loans, car title loans, or short-term, small-dollar loans obtained through online lenders. These products are available to anyone who needs them and fulfill the legal requirements necessary for obtaining a loan from a financial institution or a lender; you need to be at least 18 years of age to secure a loan.
However, there are additional requirements, which are loan- and lender-specific, such as providing the lender with the title to your car in the case of car title loans. Other requirements are universal across the board, like providing the lender with your ID, proof of residency, proof of income, and some personal information, as well as a checking account.
Providing this information to the lender is crucial, as it helps them determine whether you’re legally eligible to request the loan and whether you’re employed or have an income, thus demonstrating your ability to repay the loan.
What to Consider When Getting a $500 Personal Loan
While getting a $500 personal loan isn’t difficult, there are certain things you should consider when securing a $500 personal loan:
- Annual percentage rates (APRs) are the first thing you want to consider, as they’re associated with payday and small loans tend to be exorbitantly high. Fortunately, most lenders will disclose the APRs associated with their loans, as well as how much you’re borrowing and how much you will be paying back.
- You also want to consider application requirements. These aren’t so stringent due to the nature of the loan and its appeal to customers with bad credit, but some lenders do have stricter requirements than others. You want to pick the one that’s most likely to approve your loan.
- If you require money immediately, consider lenders that offer same-day funding. Most lenders do, but there are still those who handle deposits the following business day, while others might take a few days.
- Lastly, you want to consider the lender’s reputation. Online reviews can provide important information about how the lender does business, as well as information about the length of the approval process as well as the quality of their service.
How to Get a $500 Personal Loan
One of the easiest and most convenient ways of securing a $500 personal loan is to search online lenders. Once you’ve narrowed down your choice, you need to send in your loan application and the necessary documents and wait for the lender to make a loan offer; upon acceptance, loan funds will be deposited into your bank account.
However, there’s an easier way: simply fill out an online inquiry form. We’ll share it with the lenders in our network. Once a lender reviews your application, they’ll contact you with the loan offer and further instructions if you find the offer appealing. After you receive the funds, all you have to do is make timely payments until you repay the loan.
Frequently Asked Questions
Here are some of the most frequently asked questions about $500 personal loans:
Despite often being marketed as short-term, small-dollar loans for individuals with bad credit, which implies the lack of credit score requirements, most lenders do actually have a minimum credit score requirement of 580 FICO points. However, some lenders are known to offer their services to customers whose FICO score goes as low as 500.
The closer you are to the lower limit, the less favorable interest rates the lenders will offer due to the higher perceived risk. Missing payments or defaulting on your loan can also adversely affect your finances and your credit score.
Unless you’re facing a financial emergency in which you need access to quick cash, there are some viable alternatives to small-dollar, short-term loans. Those include lines of credit, in which you borrow against your available credit card debt; car title loan, which is secured and offers more favorable terms, borrowing from friends or family, which is a viable no- or low-interest solution, or taking an advance on your paycheck from your employer.
Small personal loans take less time to process, especially for lenders who don’t require hard-credit checks. Thus, the loan amount is typically deposited into your bank account within 24 hours of accepting and signing the loan and repayment terms.
With the streamlined online application process, fast processing, and fast approval, the money can be deposited into your account the next business day at the latest. This rule doesn’t apply to weekends and federal holidays.
You can get a personal loan from any online lender. All you have to do is search for lenders online, compare the financial products they’re offering, pick the correct one, and apply for the loan.
That often seems like a lot of work, which is why Primo Personal Loans offers to find the lenders for you. All you need to do is start the process, provide us with the necessary information, and we’ll share your application with the lenders within our network.
Upon reviewing your application, it isn’t uncommon for several lenders to offer you a loan, which eliminates the need to search for lenders yourself and significantly simplifies comparing financial products between lenders.
Summary
Obtaining a $500 personal loan doesn’t have to feel like jumping through fiery hoops or spending endless hours online searching for the best offer. Just fill in the form, and we’ll connect you to reputable third-party lenders without inquiring about the nature of your personal finance emergency.
