£500 loans.

Got bad credit and looking to borrow £500? Use Choose Wisely to compare suitable, personalised options without an impact to your credit file.

Table of contents

Written by Andrew Freelander
Read time: ~5 mins
Published: 28th September 2023

Can I get a £500 loan?

By using a comparison website like ours, you can compare loan providers online who may be willing to lend you £500 or more. Approval will depend on several factors, including:

  • Your history of managing credit products
  • Your income
  • The lender's criteria

Using our comparison site, we’ll help you to find the loan providers who are most likely to lend to you based on their eligibility criteria.

Am I eligible for a £500 loan?

You need to meet certain criteria to qualify for a £500 personal loan online. Every lender has slightly different requirements, but you'll normally need to:

  • Be aged 18 or over
  • Be a UK resident
  • Have a regular income

You'll also need a bank account with a debit card and proof you're in full or part-time employment.

Many comparison sites like ours provide an online eligibility checker, so you can discover whether you qualify for a loan without impacting your credit score.

What can I use a £500 loan for?

Once you have the funds in your account, you can spend the money how you want. A small, short term loan can help to spread the cost of unforeseen expenses, and help you budget if you don't have the cash to hand.

People may use a £500 loan to:

  • repair a vehicle
  • buy essential items
  • pay a vet bill

Remember that you'll pay interest on your loan, so only borrow money if you have no other financial resource, such as savings or borrowing from friends and family.

How quickly can I get a £500 loan?

You can often get an instant decision from a direct lender or broker on a £500 loan. Some loan companies will even deposit money into your account within 24 hours if you have a good credit rating and can provide the correct documentation immediately.

When applying for a loan online you'll need to be able to provide evidence of your identity, salary and, if required, outgoings.

Lenders tend to operate Monday to Friday and sometimes on Saturday, so if you need funds the same day, apply early on a weekday if you can.

Where can I get a £500 loan?

A comparison website like ours is an ideal place to start your search for a £500 loan.

You can find a choice of regulated lenders in one place and filter the results to ensure you get the best £500 pound loan for your needs.

You may also be able to apply for a £500 loan from:

  • a direct lender
  • a doorstep lender
  • a credit union
  • a highstreet bank

Many direct and doorstep lenders offer £500 loans online, so you can apply and get money quickly if you meet the lender's requirements.

How much will a £500 loan cost?

The cost of a loan will depend on several factors based on your borrowing needs and financial circumstances. These are:

  • The interest rate
  • The amount you borrow
  • The amount of time you take to pay back the loan
  • The terms and conditions of your loan

Here's an example

If you borrow £500 over six weeks at a representative rate of 839.20% and an annual Interest rate of 255.5% p.a. (fixed), you would pay one repayment of £647. The total charge of credit will be £147 and the total amount payable will be £647.

The annual percentage rate (APR) you may be offered is based on the lender, your credit rating and your ability to repay the loan. For instance, a £500 pound bad credit loan will cost more than a £500 loan for an applicant with a good credit score because the interest rate charged will be higher.

As a result of the Financial Conduct Authority's regulation on high-cost short-term loans, the maximum amount you will ever need to pay in fees and interest is capped at 100% of the borrowed amount. Therefore, regardless of the interest rate, if you borrow £500 for a period of six months, you will never exceed £500 in interest fees, and the total cost of credit would not be over £1000.

The APR you’ll be offered will depend on your lender and your credit rating.

How long will I have to pay back a £500 loan?

It depends on the loan term in your credit agreement, but normally lenders offer £500 loans over a short term, usually up to 12 months.

The longer your borrowing term, the more your loan will cost you, so weigh up what you can afford to repay each month and pay the loan back over the shortest period possible.

An online loan calculator can help you determine the shortest loan term based on what you can afford.

Can I get a £500 loan with bad credit?

Yes, it's possible, but be prepared to pay a higher interest rate, which could result in you paying back nearly double the amount you borrowed.

If you have no choice but to borrow £500 and you have a bad credit score, there are specialist lenders who will assess your application and find the best borrowing option for you.

What are the pros and cons of £500 loans?

An online £500 personal loan may be a cheaper alternative to a doorstep loan, allowing you to access funds quickly and budget for repayments.

A £500 loan can help you:

  • Spread the cost of essential spending
  • Cover emergency expenses
  • Plan regular repayments
  • Take control of existing debts

However, there are downsides to consider:

  • £500 loans typically have high interest rates
  • Your loan rate may be higher than advertised if you have a bad credit score
  • You'll pay penalties for late or missed repayments
  • If you cannot afford the repayments, you'll damage your credit score

Borrowing small amounts of money can be expensive so if you can turn to friends or family to borrow the money then it may be a cheaper option.

Are there any alternatives to £500 loans?

Credit union loans

Credit unions are not-for-profit community organisations. Their loan terms are usually more flexible, so you may be able to borrow a small amount at a lower rate and they'll consider your whole situation rather than just look at your credit rating.

To qualify for a credit union loan, you'll need to become a member of the union.

Guarantor loans

Guarantor loans are a type of personal loan where someone else (usually a close friend or family member) guarantees that your loan repayments are covered if you can't repay the loan yourself. They're a good option if you have a bad credit score or an irregular income.

You may benefit from a lower interest rate if your guarantor has a good credit rating, but both of you will need to have affordability and credit checks performed, so this type of loan may take longer to arrange.

Doorstep loans

This is a short-term, personal loan arranged from your home and repaid weekly to a loan agent who visits your property. Doorstep loans are typically for small amounts, between £100 and £1,000.

Also known as home credit or home collection loans, this type of loan often comes with a higher rate of interest, so it can be one of the more expensive options.

Budgeting loan

If you've been on a benefit like Income Support or Pension Credit for six months or more and need to borrow money to buy essentials, you could be eligible for an interest-free budgeting loan from the government. If you're in receipt of Universal Credit, you may qualify for a Budgeting Advance.

£500 loan FAQS

Can I get a £500 loan without a guarantor?

Yes, if you fit the lender's eligibility criteria and can demonstrate you can afford the repayments, you won't need a guarantor for a £500 loan.

What is the annual percentage rate (APR)?

The loan APR you could be offered will depend on the lender and your credit history. All lenders have to provide you with what it will be before you sign a credit agreement.

The APR takes into account all costs during the term of the loan, including the interest rate, credit charges and any extra fees. The higher the APR, the more the loan will cost you.

What happens if I miss a payment?

If you miss a repayment on your £500 pound loan, you risk additional late payment fees and a record of the missed payment will be placed on your credit report for other lenders to see.

Your lender will likely charge you a missed payment penalty, but they should contact you first. If you can afford to cover the payment, make it as soon as possible.

If you regularly miss or make late payments, it will damage your credit score which will make it more difficult for you to be accepted for credit in the future.

Can I get a £500 loan without a credit check?

No. You may see online adverts for no credit check loans, but in reality you can't borrow money without a credit check from an authorised money lender. This is because regulated lenders are bound by the Financial Conduct Authority’s strict lending rules.

Once you've submitted a full application, you will always face a hard credit check, whether you're borrowing £500 or £50,000, which will leave a record on your credit report.

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

Written by
Andrew Freelander
Take Control Author at Choose Wisely

Andrew joined Choose Wisely 5 years ago, originally working in a design capacity to make sure the website was simple to use. Most notably he worked with the Consumer Finance Association to design the comparison table of choice for High-Cost Short Term Finance products.

Important Information.

All of the information in this guide is correct at the time of writing.

If you complete a loan search application on the Choose Wisely website, the rates shown may vary based on your personal circumstances, are subject to status and are available to those aged 18 and over. Rates available range from a minimum of 13.9%APR to a maximum of 1721%APR Representative and loan repayment periods range from 3 to 60 months.

If you need financial advice you can visit stepchange, speak to citizens advice, call the national debtline or speak to moneyhelper.org.uk.

If you've been declined, please refer to your credit report to gain an understanding of why before making further applications.
You can access your credit report for free from Credit Karma, Clearscore or Experian.