Not every loan requires a large sum of money, in daily life people often find themselves in situations where they require a small amount of money. It can be for anything like a broken refrigerator or to replace an old household item.
After understanding this need for small loans a lot of companies have started offering a variety of little loans one of them being the £500 loan.
The £500 loan is specifically crafted to help people borrow £500 in the most efficient way possible, as the need for loans of such minimal amount occurs unexpectedly and though the amount is minimal the necessity for it is as important as ever and that is exactly why there are a variety of little loans available.
Does every lending company offer a £500 Loan
It is safe to say that most of the banks and lenders have identified the need for small loans and have made it available to people, the £500 loan can be availed online even without having to go the bank or talk to an executive making it practically available at any given point of time. But it is important to know that there will be no £500 loan without a credit check. Also, one frequently asked question regarding this is “will I get the £500 loan if I have a poor credit score?”, Yes, you will get the loan approved as the concept of £500 loan for bad credit is becoming popular and many lenders now specialize in bad credit loans for customers who may have been turned down by other lending agencies, it is also known as short term loans.
Short term loans
A short term is particularly made for lending people small amounts of money for this they often consider people with a poor credit score. It is ideal for someone who is in need of a quick fix but does not have access to any other methods of borrowing. It does sound too good to be true, but there’s a catch, the borrowed money will have to be repaid in a given period of time which means the loan which means you will not have a loan hanging around for too long.
The £500 loan offered by lenders in the UK can be repaid over a period of many months as the lenders understand that paying the whole amount in one settlement can stretch your expenses or bring you back to square one.
£500 loan checking procedures
Bad credit is what stands in the way of most people who are looking for a £500 loan credit, and the bad credit usually is due to the bad handling of finances. Though there are no short term loans without a credit check and financial check as the lender would still want to gauge your finances and your ability to pay back the borrowed sum, but at the same time there is not a lot to worry about this offer was made to benefit everyone even the applicants with a poor credit score.
How do £500 loans work
The most common type of £500 loan is the monthly payday loan which is supposed to be returned the next time you get paid and the typical duration for it is 2 to 4 weeks.
What if you won’t be able to pay it back in 2-4 weeks. Well, there are lenders who will let you pay it back over a period of time for a particular fee or charge a high-interest rate.
Let us look at some pros and cons of a £500 loan
- Quick turnaround time: Some lenders give you the loan instantly while some take a little bit more time. But the bottomline being, if you’re in need of the loan on the same day you are bound to get it.
- Easy approval: It is no question that borrowers with a poor credit score find it hard to find lenders and have no other access to avail a loan but that is not the case with short term lenders they have a more lenient than others
- High-Interest rates: £500 loans come with a high-interest rate.
- Disreputable lenders: Of course not all short term loan lenders are credible there are a few predatory lenders who take unduly advantage of people in need of money. It is wise to know about the lender you are borrowing from and also it is wise to cross-check lenders before taking a risk.
How to compare and choose your lender
As it was mentioned earlier that not all lenders are reputable, different lenders charge different interest rate and with all of this in mind how to choose the best lender for you, here is a small list of criteria that one can use to compare different lender.
APR(Annual Percentage Rate):
The annual rate charged for borrowing or earning through an investment is called APR. It is expressed as percentages that represent the actual yearly cost of funds over a loan term. APR is also one of the best ways to compare loans with different terms and rates as it lets you know how much it costs over a year
Is the lender a reputable one?
Making sure that the lender you’re going to borrow from is reputable is very important as there are a few lenders who prey on people who are in need of money and you can compare lenders by checking out their website reviews.