Please note: High-cost short-term credit is unsuitable for sustained borrowing over long periods and would be expensive as a means of longer-term borrowing.
Compare £500 short-term loans
If you’ve found yourself faced with unexpected costs, you might be considering a £500 payday/short-term loan to tide you over. Use our guide to compare rates and terms from some of the main UK lenders, estimate overall costs and learn more abut how short-term loans work.
Compare £500 loans
We compare payday/short-term loans from
It’s true – life’s like a box of chocolates and you never know what you’re going to get. Regardless of how carefully you’ve budgeted, sometimes an unexpected cost can take you by surprise. If you’ve found yourself £500 short, say from a large vet’s bill or a car giving up the ghost, you might be thinking about a getting a £500 short-term/payday loan to bridge the gap.
“High-cost short-term credit” is a fast and easy but very expensive way to borrow, with interest rates typically higher and durations typically shorter than most other forms of credit. These loans are designed to cover a temporary, unexpected shortfall in funds for a brief period. For longer-term issues, they’re definitely not the answer. But, if you do decide to take out a short-term loan and have your application accepted, you could have the money transferred the same day. Before you take out a £500 payday/short-term loan, consider alternative options – a good place to find help and advice on this is the government’s money advice service.
Is high-cost, short-term borrowing a good idea?
Payday/short-term loans are a very expensive method of borrowing and should only be considered as a last resort. They may not solve your money problems, and are not a good idea for borrowing over longer periods, or for sustained borrowing.
Before you apply for a payday or short-term loan, make sure you’ve considered other options. Is the expenditure that you’re planning absolutely essential? If you can defer a purchase then you could save yourself money in the long run. If you’re struggling to pay a bill, then why not talk to your electricity, gas, phone or water provider to see if you can work out a payment plan? Read more about alternatives to payday loans at moneyadviceservice.org.uk.
What you need to know about a £500 short term loan
Payday/short-term lending generally involves small amount for short periods. Although many lenders focus more on affordability than credit history, don’t assume you’ll be automatically approved for a £500 loan. Many lenders prefer to start small, and increase credit limits as borrowers prove their ability to meet repayment schedules. If you don’t get approved first time, it would be a mistake to submit new applications to multiple alternative lenders. If you make multiple applications for credit in a short space of time and lenders see this in your credit report, they’re likely to be concerned.
Key features of a £500 short-term loan
- High interest rates. Expect to pay much higher interest rates than with most other forms of credit. Rates are legally capped at 0.8% a day, but many lenders set rates on or fractionally below this cap. To put that in perspective, if you took out £500 for 30 days at 0.8% per day, you could have to pay £120 back in interest.
- Quick access to funds. Once your application for a £500 short-term loan has been accepted, some lenders will be able to have your loan in your account within a matter of hours or even minutes.
- Short repayment periods. Although traditional “payday” loans last for up to a month, the majority of payday lenders now allow borrowers to spread repayments over a number of months. This can be handy, as it means smaller, more manageable repayments. However it also means that the overall cost of borrowing will be higher.
- Early repayment. You will normally be able to repay part or all of your loan early at any time. This is a smart thing to do (if you can manage it), as it means you could save money on interest. Always check the early-repayment terms before you take out a loan.
- Paid back by CPA. Typically when you sign up for a £500 short-term loan your repayments will be taken through Continuous Payment Authority (CPA). However, some lenders offer the facility to pay by direct debit or by a manual bank transfer instead.
Benefits and drawbacks of a £500 short term loan
To be eligible for a £500 short-term loan you’re likely to need to meet the following criteria:
- Be aged 18 or over.
- Be a UK resident.
- Hold a bank account.
- Have an email address and mobile number.
- Have a regular income.
Meeting these requirements does not guarantee you will be able to take out a £500 loan – only that your application will be considered.
What is a Continuous Payment Authority (CPA)?A CPA is a recurring payment in which you give a company permission to withdraw money from your account on a regular basis.
CPA differs from direct debit because they give the company being paid the ability to withdraw money from your account whenever they wish, and to take payments of different amounts without consulting you. Most payday loan companies will use CPA to collect your repayments, however you can cancel this at any point by either consulting with your provider or your bank.
Frequently Asked Questions
More guides on Finder
What you need to know about getting a mortgage if you’re buying or refinancing a farm or farmland, including the factors lenders consider when you apply for one.
Mortgage for a hotel
In-depth guide to taking out a commercial mortgage to buy or refinance a hotel. Find out how to get the best rates, factors lenders consider and what you need to apply.
Bridging loan vs commercial mortgage
Find out if a bridging loan or commercial mortgage would suit you if you’re buying or refinancing commercial property and when a bridging loan can be a better option.
10 ways to improve your credit score
The best methods for getting your credit rating in top shape, and boosting your credit score.
Limited company loans
See how to get a business loan as a limited company in the UK, and how much you can borrow.
Sole trader loans
Find out how to get a loan if you work for yourself, including which lenders offer business loans for sole traders.
Chain break finance
Learn everything you need to know about chain break finance – a type of bridging loan that stops you losing your dream home if the sale of your existing one falls through.
Fix and flip
Read our in-depth guide to fix and flip and how this type of property investment works, including the factors you need to consider, the risks to be aware of and how to finance it.
Commercial bridging loan
Everything you need to know about commercial bridging loans. We look at when they’re useful, how they work and what to be aware of before taking one out.
Hard money loans: Short-term finance in the UK
Learn everything you need to know about hard money loans – also known as bridging loans. Find out how they work, what they can be used for and their benefits and downsides.
Ask an Expert