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 about how short term loans work.

Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk.

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 loans

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1 - 4 of 4
Name Product Available Amounts Monthly repayment Total payable Link
QuidMarket Short Term Loan
£300 to £1,500
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Representative example: Borrow £300 for 3 months at a rate of 292% p.a. (fixed). Representative APR 1307.1% and total payable £454.38 in 3 instalments of £151.46.
The Money Platform Short Term Loan
£100 to £1,000
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Representative Example: Borrow £500 for 6 weeks with repayment method of One Payment. Total amount payable: £647. Representative 839.20% APR, interest rate 255.5% per annum.
Moneyboat Short Term Loan
£200 to £1,500
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Representative example: Borrow £400 for 4 months at a rate of 255.5% p.a. (fixed). Representative APR 939.5% and total payable: £597.48 in 4 payments of £149.37.
Lending Stream Instalment Loan
£50 to £1,500
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Representative example: Borrow £200 for 6 months at a rate of 292% p.a. (fixed). Representative 1,333% APR and total payable £386.61 in 6 monthly payments of £64.44.
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Please note: You should always refer to your loan agreement for exact repayment amounts as they may vary from our results.

We compare payday/short term loans from

Drafty Line of Credit
QuidMarket Short Term Loan
The Money Platform Short Term Loan
Moneyboat Short Term Loan
Lending Stream Instalment Loan

Overview

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 MoneyHelper.

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

  • Quick turnaround time.
    Advances in technology and competition between lenders has dramatically driven down the time between application and receiving your loan. Now many lenders are able to give you a decision on your application and transfer your credit within the space of a few hours.
  • Option to spread repayments.
    Short term lenders will often allow you to spread repayment over a number of months. That means multiple smaller repayments, rather than one larger repayment. However because you’re borrowing for longer than you might with a traditional “payday” loan, you’ll pay more in interest overall.
  • Easier approval.
    Short term loans are often more straightforward to acquire than other forms of credit, as they involve smaller sums of money and shorter terms. Some providers specialise in lending to those with a poor credit score by focusing on affordability rather than credit history.
  • High interest rates.
    Interest rates on £500 short term loans are generally much higher than with personal loans, credit cards and other forms of credit. Many lenders choose to price their loans at or around the legal cap of 0.8% per day.
  • Not a long-term solution.
    Short term loans are just that – for the short term. They are designed to cover an unexpected shortfall. Don’t expect them to cover or solve longer-term financial difficulties. For help and advice on dealing with longer-term financial difficulties a good place to start is the government’s MoneyHelper.
  • Disreputable lenders.
    Be aware that not all lenders advertising online are legitimate. Before taking out a loan ensure you have thoroughly researched the lender and made sure they are approved by the Financial Conduct Authority (FCA). Taking a loan from a lender that isn’t approved puts you at great financial risk.

Eligibility requirements

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.

Bottom line

If you find yourself in need of short term cash, payday loans could help bridge the gap. But taking out this type of loan should be researched and finding alternative options first could save you money in the long term. Short term loans are an expensive option.

Frequently asked questions

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We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables has the source: Moneyfacts Group PLC. In other cases, Finder has sourced data directly from providers.

Written by

Chris Lilly

Chris Lilly is Head of publishing at finder.com. He's a specialist in personal finance, from day-to-day banking to investing to borrowing, and is passionate about helping UK consumers make informed decisions about their money. In his spare time Chris likes forcing his kids to exercise more. See full profile

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