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.
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.
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.
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.
To be eligible for a £500 short term loan you’re likely to need to meet the following criteria:
Meeting these requirements does not guarantee you will be able to take out a £500 loan – only that your application will be considered.
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.
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.
Browse our collection of payday loan guides, designed to answer all of your short term loan questions and help you find the right payday loan.
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