If you are in urgent need of money, the most logical choice would be to avail a short term loan. It is a relatively simple process, you will have to visit the lender’s website, choose the loan type (£500), fill in and submit the application. In today’s digital world, you will know the status of your application within minutes, whether it was approved or rejected.
If your application has been approved, the lender will deposit the loan amount into your bank account within 10 minutes to 1 working day, depending on the policies and procedures of the lending organization and your bank.
How to Avail a £500 Loan with Bad Credit?
The most sought after type of short term loan is the £500 loan. Nowadays, this loan has become more common and lending organizations have started competing with each other by offering better repayment plans and interest rates for customers. Initially, £500 loans were required to be repaid within one month.
The Eligibility Criteria When Procuring a £500 Loan
The loan applicant should meet the following criteria before availing a £500 loan.
- Loan applicant must reside in the UK.
- Loan applicant must be at least 18 years old.
- Loan applicant must have a steady source of income.
- Proof of employment for part-time or full-time is required.
What are the Benefits of Availing a £500 Loan?
In the UK, £500 loans have had a positive impact. More traditional banks and premium lending organizations have started short term loan programs for their customers. The benefits of a £500 loan are listed below.
- When availing this loan, there are no loan restrictions to where the money is used.
- The process of availing a £500 loan can be done entirely online. The application form can be filled and submitted along with a copy of the necessary documents via the internet.
- When compared to other loans, a £500 loan can be availed in a much shorter time frame.
Will Availing a £500 Loan Affect Your Credit Score?
If you are looking to procure a £500 loan, know that it will reflect on your credit report. Make sure to clear the monthly loan repayments on time as this will prove to lenders that you are a capable and trustworthy borrower.
However, if you fail to make the necessary monthly payments, your credit score will be negatively affected. This will result in your interest rates going up as well as close scrutiny from the lender. If this happens, the next time you apply for a loan, your credit report will show your defaulted payments and you will be perceived as a high risk applicant.
Who are the Lenders Offering £500 Loans in the UK?
The Financial Conduct Authority (FCA) is the regulating body incharge of determining the interest rates lending organizations can offer. Some of the various money lending organizations recognized by the FCA include New Horizons, Instant Lolly, Moolr, Swift Money, Sunny, etc.
You will also find lending organizations that decide their own interest rates. These lenders are not recognized by the FCA. It is vital that the loan applicant does their own background verification for the lender before availing a £500 loan. Do not approach lenders who have a seedy reputation as they will offer you loans with exponentially high interest rates and have hidden clauses. Listed below are few of the factors a loan applicant can use to compare lenders.
Annual Percentage Rate
The Annual Percentage Rate (APR) is a simple way to compare loans with different interest rates and loan terms. The applicant can see how much money will be spent over a year.
The Expenses Incurred
Apart from the loan, there will be other expenses incurred in the form of hidden charges, service fees, online fees, transaction fees, etc. Loan applicants can check and compare lenders by the total loan amount along with expenses incurred from start to end.
Reputation of the Lender
If you are looking to avail a £500 loan in the UK, be sure to compare and research lending organizations to ensure that you are choosing the right lender. Loan applicants can visit online forums and read reviews to check the reputation of the lender based on customer satisfaction and feedback.
For this purpose, the Consumer Financial Protection Bureau (CFPB) has listed money lending organizations based on their legitimacy on their website.
Business Operations of the Lender
There are certain lenders that do not offer their services or run operations to loan applicants residing in specific cities or states. This is because they either, illegal lenders or do not have authorization from the FCA in that specific jurisdiction.
Remember that if you come across lenders who offer any type of loan without doing a credit check, it is too good to be true. Many of these scammers target people with a bad credit score and who are desperately in urgent need of money. Your credit score is of no interest to them, they are more likely to ask for personal details such as the assets you possess, your bank account number, etc. Another tactic is that they will ask you to place some kind of collateral or to pay a certain amount upfront to start the process.
Before you choose a lender, exercise caution if you get lenders that offer you loans over the phone, they will ask you to send money to an individual rather than a lending organization.