Without enough savings on your bank, you will surely have a hard time scraping together $500 to cover urgent or emergency expenses. You have to keep your budget for your daily cost of living, and there are also bills that you need to pay. If your monthly income doesn’t fit the bill, your only option is to borrow the cash that you need at the moment.
Thanks to online lenders, you can now obtain a small loan to solve your problem. For example, you can apply for a 500 dollar loan today to pay for the important or sudden expenses that are troubling you at the moment.
The good thing with this type of loan is that it doesn’t require borrowers to have a good credit score. Plus, your lender can conduct a quick assessment of your capability to repay the loan and give an instant decision to your loan application to secure the cash that you need.
There are several benefits of taking out a $500 loan, but you should also be cautious of the risks attached to it. If you have questions that need to be answered, just read this blog post to learn more about $500 loans.
Why a $500 Loan Different from Other Types of Loans?
When you’re borrowing money from a traditional bank, it usually involves a large sum of cash. Bank loans can range from thousands to hundreds of thousands of dollars, and they are typically used for medium to large purchases.
A $500 loan, on the other hand, fits under the small loan category. It can also be referred to as payday loans because your payment will be taken off your next paycheck. Since the loan amount is small, the repayment term is shorter, and the interest rate is more affordable than other types of loans.
Moreover, it’s less hassle to apply for small loans today since there are now lenders that operate online. With fast qualification checks, the lender can also decide in no time on whether to approve your application.
Requirements for Getting a $500 Loan
Even though there’s only a soft credit check or no credit assessment when applying for a $500 loan, there are still other requirements that you have to fulfill to qualify for it. You can’t just apply and then the lender will give you the sum of cash you want to borrow. There’s still a short application process that you have to undergo.
The requirements for obtaining a $500 loan may vary by lender or by state. But, commonly, you’ll have to provide the following:
- The loan applicant must be 18 or above to get approved for the loan. He/she should provide a valid ID as proof.
- The borrower must be a resident for at least a year in the state where he/she is applying for the loan.
- The loan applicant must have employment. He/she must give the lender a certificate of employment or a letter signed by his/her employer.
- The borrower should provide proof of income. It can be a pay stub, last year’s federal tax return, or personal/business tax assessments.
You should prepare the requirements mentioned above to speed up the application process and obtain the amount of cash you need.
Common Uses of a $500 Loan
People have a variety of reasons to take out a $500 loan. Typically, this loan is used for sudden, unexpected expenses that just need a relatively small sum of money that you don’t have at the moment.
College students can apply for a $500 loan while waiting for their student loans or financial assistance from the federal government. Although universities and colleges allow such students to start the semester while their tuition fees are not yet paid, there are other expenses such as books and allowance that need to be covered. So, a small amount of loan like a $500 loan is a big help.
Employees or workers who are in jobs that don’t pay on a fixed schedule may also obtain a $500 loan to cover their day-to-day purchases and bills. When their paycheck comes, they can repay their loans to avoid having a negative mark on their credit profiles.
You can also use a small loan to pay for minor house repairs or car repairs. It’s also an excellent option to cover medical checkups or travel expenses. Whatever reasons you have for borrowing a small sum of cash, a $500 loan is an excellent option for you.
Questions to Ask Before Taking Out $500 Loans
It’s crucial to ask questions when you’re planning to obtain a $500 loan. Follow this checklist to know what to ask yourself or your lender before you get this type of loan.
- What is the Annual Percentage Rate (APR)? When you’re comparing multiple lenders, you should always ask about the APR of the loan you want to get. It’s an essential factor because the APR tells a lot about the lender and its loan offer.
- How much are the fees? Every state and lender has a standard range of fees for their small loan offers. Typically, you have to pay around $70 to $150 for a $500 loan.
- Does the lender have a good reputation? You should research about the lender before applying for a small loan because there are many online scammers nowadays. You can read customer reviews or find out complaints on its Consumer Financial Protection Bureau or Better Business Bureau page.
- Are $500 payday loans available in my state? In some states, payday loans are not legal. So, when you’re thinking of taking out a payday loan, make sure that it’s available in your area.
Now you know what a $500 loan is. It’s a type of small loan that you can use for purchases or expenses that require a small sum of cash. Lenders that offer such small loans don’t perform strict credit checks, but you still need to meet other requirements to qualify for it.