A $500 short term loan is usually taken for some immediate expenses, because you run of out cash before your payday. Many online lenders give small cash loans since it is easy to meet their requirements. Most working adults will be able to get a loan based on income and the repayment date is usually set at your next pay day.
When you need a $500 loan now, it is useful to know beforehand the requirements to get a loan approved, your expected borrowing costs, and any similar or equivalent offer if possible. That said, it is still preferred if you can avoid borrowing money since it will cost you financing fees. Who knows whether you can get by next month before a second loan because you are cash tight again. That can spiral into debts and financial mess very quickly.
Signature Loan Lenders' Requirements
Most signature loan lenders will check whether you have a stable job for the past 3 months and a checking account. Some will check your credit score, others may use teletrack or other alternative borrowing/paying data to evaluate your suitability for a loan. The maximum amount you can borrow unsecured for 30 days depends on your income. The standard practice in some states is 25% of your income, in other words, you can take $2500 immediate signature loans if your income is $10k. this limit really depend on the state you reside in, as well as the individual lender.
To simplify funds transfers to and fro, direct lenders will request that you authorize them to deposit and withdraw money from your checking account. This allows the loan money to be deposited directly into your bank account conveniently. And when payment is due, the amount plus any interest and fees will be automatically deducted from your account. This is slightly different compared to getting a loan in person - you may be familiar with having to leave a post-dated check for the loan payment.
How Much For A $500 Loan With Bad Credit
The amount of financing fees for a loan with bad credit vary depending on your local laws, but in general, they are higher compared to bank rates. For example, you can expect to pay back $580 for a $500 dollar loan. Converting the cost in terms of APR, the loan rates can be 200% for a signature loan, 430% if you pay after 14 days or 880% for 7 days. Aside from the payment date which is usually tied to your payday, there are many government imposed rules and stipulations. These will be made known to you by your lender. Note that some places prohibit loan lenders from making short term credit - only 32 states allow them with certain restrictions. For example, the maximum payday loan may be $350 in an area while someone else can borrow $2000 loans.
Borrowing $500 For 30 Days - Worth It?
To many borrowers, these high APR are not relevant because they need a fast loan now and they cannot get a traditional loan. So looking at just the absolute amount of fees, paying $80 for a unsecured loan can still be acceptable in some situations. Assuming you are definitely able to pay back the money on time, it is easy to decide whether the cost of the loan is worth it or not.
You can also request for a loan extension, for example by another 30 days. You have to pay additional financing fees to do so and you are not allowed to repeatedly extend payments. Note that this can easily spiral a signature loan into a $5000 debt within 12 months if you keep delaying payments. The interest fees will continue to accumulate while you are trying to find money to pay it back.
Short Term Loan Alternatives
There are several unsecured loan options, which may offer similar cost compared to payday loans. For example, if you have a credit card, you may be able to take an overdraft or immediate installment loan for $500, depending on your credit limit. Note that these are quite expensive, so go easy on the borrowing.