Small Personal Loans $500

For small personal loans of $500, explore options and apply easily with zaving today.

Last updated by Zaving Editorial Team, on January 19th, 2024

Are you searching for small personal loans of $500? If you need some urgent cash to get you through a tight spot, you can turn to zaving to help you explore your options. Our online service makes applying for a loan quick, easy, and hassle-free. If your loan is approved, cash can land in your bank account straight away – it's as simple as that! Start the application process right here today with zaving.

What are small personal loans and how do they work?

Small personal loans are a type of unsecured loan, meaning they don't require collateral like a car or house. They are typically used for smaller amounts, such as $500, and are intended to be repaid over a relatively short period of time, usually between 12 and 60 months.

Here's how small personal loans work:

  • Application: You'll typically need to provide basic personal and financial information, such as your income, employment history, and credit score. The lender will assess your creditworthiness and determine your eligibility for the loan.
  • Approval and funding: If approved, you'll receive a loan agreement outlining the loan amount, interest rate, repayment terms, and fees. Upon accepting the terms, you'll receive the loan proceeds, typically in a lump sum, directly into your bank account.
  • Repayment: You'll make fixed monthly payments towards your loan principal and interest. The exact payment amount will depend on the loan amount, interest rate, and repayment term.
  • Credit impact: Making timely payments can help improve your credit score, demonstrating your creditworthiness. However, late or missed payments can negatively impact your credit.

How are small personal loans different from payday loans?

Small personal loans and payday loans serve as avenues for quick access to funds but diverge significantly in their terms, costs, and applicability to various financial circumstances.

Small personal loans, devoid of collateral requirements, typically span from $2,000 to $5,000 and offer repayment periods extending from 12 to 60 months. Interest rates generally range between 6% and 36%, making them more affordable.

These loans are apt for substantial expenses like consolidating debts, home repairs, or medical bills. They are particularly beneficial for borrowers with good to fair credit, providing more favorable terms and flexibility.

In contrast, payday loans, also unsecured, cater to smaller amounts, usually ranging from $50 to $1,000, and demand repayment within a brief window of 2 to 4 weeks. However, their interest rates skyrocket, often falling within the 391% to 782% range.

Payday loans primarily target short-term emergencies and individuals with restricted credit options. Due to their exorbitant cost, they're advisable as a last-resort option, as they can potentially ensnare borrowers in a cycle of debt.

Key distinctions between small personal loans and payday loans encompass:

  • Loan amount: Small personal loans offer larger sums compared to the restricted amounts available through payday loans.
  • Repayment term: Small personal loans allow for longer repayment durations, enabling more manageable monthly payments, unlike the abrupt demands of payday loans.
  • Interest rate: Small personal loans boast substantially lower interest rates, reducing the overall borrowing expenses in contrast to the exorbitant rates associated with payday loans.
  • Credit requirements: Small personal loans typically necessitate good to fair credit standings, while payday loans may accommodate individuals with poor or no credit history.

Can I get a small personal loan with bad credit?

You may be able to get a small personal loan with bad credit. While your credit score will affect the interest rate you qualify for, there are lenders who specialize in loans for borrowers with bad credit. They might scrutinize other factors like income stability, employment status, or overall financial health to determine your eligibility.

Also keep in mind that having bad credit might limit your options or result in higher interest rates or stricter terms.

Here are some tips for getting a small personal loan with bad credit:

  • Shop around for the best interest rate. Not all lenders are created equal, so it's important to compare interest rates from multiple lenders before you choose one. You can get quotes online or from your local bank or credit union.
  • Be prepared to provide documentation. Lenders will need to verify your income and employment, so be prepared to provide documentation such as pay stubs, W-2s, and bank statements.
  • Consider a cosigner. If you have a friend or family member with good credit, they may be willing to cosign your loan. This can help you qualify for a lower interest rate.
  • Make a plan for how you will repay the loan. Before you take out a loan, make sure you have a plan for how you will repay it. This will help you avoid missing payments and damaging your credit score.

More of your frequently asked questions about payday loans

How can I improve my credit score?

Enhancing your credit score necessitates critical actions: review reports for errors, prioritize timely bill payments, and maintain credit card balances under 30% of the limit. Sustain a stable credit history, diversify credit types, and minimize new accounts. Explore credit-building options and consider consulting a credit counselor for ongoing advancement.

How quickly can I get a small personal loan?

The speed at which you can obtain a small personal loan depends on various factors, including the lender, your creditworthiness, and the complexity of your loan application. However, in general, you can expect to receive your loan funds within one to five business days if you are approved.

Are there restrictions on what I can use my small personal loan for?

Small personal loans generally offer flexibility in how you use the funds. Unlike specific loans like a mortgage or a car loan, small personal loans often don't have restrictions on how you can use the money. You can typically use the loan for various purposes such as consolidating debt, covering medical expenses, making home repairs, or handling unexpected costs. However, it's always a good idea to check with your lender about any potential limitations or specific terms associated with the loan.

How do I choose a small personal loan?

Choosing a small personal loan requires careful consideration of several factors to ensure you secure the most favorable terms and conditions. Assess your financial needs and identify the specific loan amount, compare interest rates from multiple lenders, pay close attention to the APR, evaluate loan terms, check your creditworthiness, consider cosigning options, compare fees and costs, read the fine print, and seek professional advice if needed.