Technicalities of Availing a £500 Loan in the UK

If you are in urgent need of cash, the most popular short-term loans offered by UK lenders is the £500 loan. Many people avail of this type of loan as it is a good solution to borrow a small amount without being tied down to long-term repayment plans. Short-term loans are preferred as the loan amount required can be obtained much faster. Many lenders who offer £500 loans operate online which makes the application process much easier.

If you are looking to avail a short-term £500 loan, visit the lender’s website of your choice, fill in and submit the application form. Usually, you will know within minutes if your application was approved or rejected. Once you have been approved, the lender will send the money needed into your bank account within 10 minutes to 1 working day. However, this time may differ as each bank has its own policies and procedures.

How to Avail a £500 Loan with Bad Credit?

Prior to this option being introduced, having a bad credit score immensely reduced your chances of availing a loan, regardless of the type. Furthermore, some people in desperate need of money were forced to take out a loan with exceedingly bad repayment terms and conditions.

Now, the most sought after type of loan is the fixed amount £500 loan. Since this loan has become much more common, lenders are competing with each other by offering better rates and repayment plans for customers. When it was first introduced, these loans were required to be repaid in a span of one month.

What are the Main Features of a £500 Loan?

Some of the standout features of this type of loan are listed as follows.

  • The £500 loan can be availed in a short time period when compared to the other loans.
  • The application process of a £500 loan can be done entirely online.
  • When availing a £500 loan, there are no restrictions as to where the money can be used.
  • There are no issues faced such as a credit score or credit check when availing this type of loan.

What is the Eligibility Criteria for Availing a £500 Loan?

The following criteria should be met by the loan applicant before availing a £500 loan, as listed below.

  • The loan applicant should be at least 18 years of age.
  • The loan applicant should be residing in the UK.
  • The loan applicant should be employed, either part-time or full-time (certain lenders require the applicant to be employed full time).

The Effects on Your Credit Score for a £500 Loan

Taking a £500 loan will be reflected on your credit report. If the repayment is made on time, your credit score will not be affected as regular payments will be the focal point of the loan applicant and prove their capability of being a responsible borrower.

However, if you fail to do so, your credit score will be significantly affected. The interest rates will also increase and you will face heavy scrutiny as the lender will perceive you to be untrustworthy. When you try to avail another loan, your credit report will show that you have defaulted and lenders will deem you as a high risk applicant which could be problematic when you have an urgent need for money.

Who are the Lenders that Offer £500 loans?

There are many money lending organizations recognized by the Financial Conduct Authority (FCA) such as Swift Money, New Horizons, Sunny, Instant Lolly, Moolr, etc. The FCA is incharge of regulating the interest rate on offer from lending organizations. However, there are lenders that decide their own interest rates as well. The loan applicant should exercise more caution and do their own background verification when deciding on which lender to avail the loan from.

Some of the ways the applicant can use to compare lenders are listed below.

1. What is the Annual Percentage Rate (APR)?

The APR is the simplest way to compare loans with different terms and rates since it shows the applicant how much they will be spending over a year.

2. What are the expenses incurred or fees?

The fees will let the applicant know how much they will actually be paying for the loan required from start to end.

  • The reputation of the lending organization

The applicant must do their own research to make sure that the lender they have chosen is authorized and reputable. Checking online reviews and forums with regards to the nature of their lender is advisable. The Consumer Financial Protection Bureau has a page dedicated to the legitimacy of money lending organizations for this very purpose.

  • Does the lender operate in your city or state?

Certain lenders do not operate or offer their services to applicants residing in specific cities or states because they either, are not authorized by the governing bodies in that jurisdiction or are illegal lenders.

To know more about loan eligibility uk, read this article.

How to find out if a lender is legit?

If you happen to come across lenders that offer any type of loans without a credit check, it could be a hoax. Scammers feed off people who have a bad credit score and who are in urgent need of money. They are less likely to show interest in your credit history and will ask for personal details such as your bank account number, the assets in your possession, etc. Another trick is that, they will ask you to pay a certain amount upfront for ‘paperwork’ or make you place some kind of collateral.

Before choosing a lender to avail a £500 Loan in the UK, be extremely wary of lenders who offer you loans over the phone and who ask you to send money to an individual rather than an to a lending organization.


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