If you need cash now, but you’re one of the 37% of Americans the Federal Reserve estimates can’t cover a $400 emergency expense with cash or its equivalent, you may be able to get $500 or more via a payday alternative loan (PAL), cash advance app, credit card cash advance, or even some personal loans.
But some options are better than others, depending on your situation, and what's available to you depends heavily on your credit score and history. Here are a few notable types of $500 loans, what you should watch out for, and alternatives.
1. Personal loan
A personal loan is a lump-sum loan that’s repaid through monthly installments over a set term, usually between one and seven years. While many lenders offer loan amounts starting at $1,000, you can find a few lenders that will lend you $500. For example:
- Navy Federal Credit Union offers personal loans as low as $250, with APRs from 8.99% to 18.00%, depending on your credit, and terms up to 60 months.
- OppLoans offers $500 loans, but APRs are 160% (via Credible). While it reports payments to the credit bureaus and offers terms up to 18 months, you should only consider this option if you can't qualify for a traditional personal loan.
Compared to other small loan options, personal loans tend to have longer repayment periods, more manageable monthly payments, and lower APRs. That said, they can be more difficult to get if you have bad credit.
Many lenders offer a quick online process so you can see if you prequalify within minutes (and without hurting your credit score). Just remember that prequalification is not an offer of credit, and when you submit a formal application the lender will conduct a hard credit check, which can temporarily drop your score a few points.
All APRs reflect autopay and loyalty discounts where available | LightStream disclosure | SoFi Disclosures | Read more about Rates and Terms
2. Cash advance via an app
In recent years, various cash advance apps have cropped up that let you borrow against your next paycheck. For example, the Dave app offers cash advances of up to $500 to approved users.
Upon approval, you can transfer the advance amount to your bank account for free, or expedite the transfer for a fee. The fees range from $1.99 up to $13.99, depending on the amount you transfer and where you send it. At the time of publication, a $500 instant transfer to a bank debit card through Dave costs $13.99. For a one-week loan, the APR would be 145%.
Cash advance apps can be quick, convenient, and even free. But the fees, terms, loan amounts, and eligibility requirements vary by provider. Further, the fees can be much higher than equivalent personal loans, from an APR perspective.
3. Cash advance via credit card
Most credit cards allow you to withdraw up to a certain percentage of your credit line in cash through an ATM or bank. The upfront fees are commonly around 2% to 5% of the advance amount. So, a $500 cash advance could cost you $10 to $25 plus interest.
Importantly, cash advances often come with higher APRs that apply immediately and until you pay the amount off in full. For example, if your APR is 30% and you advance $500 plus the $25 fee, you’d pay about $13.10 per month in interest to carry that balance.
Credit card cash advances can be convenient if you already have a credit card with an available balance. That said, the combination of the fee, the ongoing interest charges, and the lack of a payoff date can make them relatively expensive.
4. Payday alternative loans
Payday alternative loans (PALs) are small, affordable loans offered by certain federal credit unions. They were designed by the National Credit Union Administration (NCUA) to create an affordable alternative to payday loans.
PALs can range up to $2,000, with no minimum, and come with terms up to 12 months. Further, the issuing credit union can only charge fees to cover the actual costs of processing the loan applications, and APRs are capped at 28%
5. $500 loans to avoid (e.g., payday loans)
A payday loan refers to a small, short-term loan that you repay from your next paycheck — often within two to four weeks. They generally don’t require a credit check, but because of their typically high costs these loans have been deemed predatory in the past. Many states regulating their maximum loan amounts, terms, and finance charges. A handful of states have even banned them.
Car title and pawn shop loans are both plagued, in general, with these same issues and are best avoided as well.
Where to get a $500 loan
You can find $500 loans from a variety of providers, including:
- Personal loan lenders: A few lenders offer personal loans of $500, though loan minimums of $1,000 or more are far more common. Check out Personify, Oportun, and First Tech for $500 personal loans.
- Cash advance apps: Popular apps offering cash advances up to $500 include EarnIn, Dave, and MoneyLion.
- Credit card providers: Most credit cards allow for cash advances. Shop around and compare rates.
- Federal credit unions: Federal credit unions that belong to the NCUA may offer PALs. Find one near you.
How to qualify for a small personal loan
Common eligibility criteria for obtaining a $500 personal loan include:
- Credit score: You may need to meet minimum credit score requirements. Applicants with FICO scores below 670 (generally the benchmark for good credit) may not qualify, although some lenders cater to borrowers with fair to bad credit.
- Credit report: Lenders often check your credit reports to review your payment history, outstanding debts, and other records. Derogatory marks or high credit utilization rates can result in denials.
- Income: Lenders will check your income amounts, sources, and payment frequency.
- Employment status: Many lenders require you to be actively employed and will ask about your employment history.
- Valid government ID: You must have a valid identification document from the U.S. government.
- Active bank account: You must have an open and active bank account where the funds can be deposited.
Check Out: Best Small Loans
Time to fund a $500 loan
Here are the funding times you can expect from various providers:
- Personal loan lenders: Some personal loan lenders can make approval decisions within minutes and deposit the funds as soon as the next business day, while others can take up to a week.
- Payday loan lenders: Online loans are typically funded the next business day, while in-store loans are funded the same day.
- Cash advance apps: Standard bank transfers can take 2 to 5 business days, while express transfers can be completed in seconds or minutes.
- Credit card providers: Once approved, it can take 5 to 7 business days to receive a credit card in the mail. But cash advances are available same-day once you have a credit card.
- Federal credit unions: Credit unions will vary, and could take up to a week. Check the details with your credit union of choice.
How much will a $500 personal loan cost?
The cost of a $500 personal loan depends on the following factors:
- Interest rates: Lenders will assign you an interest rate, which determines the percentage of the loan amount that you’ll pay per year in interest.
- Fees: You may also be charged fees for the application, the loan origination, late payments, and more.
- Loan term: The term will determine the amount of interest you have to pay. The longer your repayment period, the more expensive the loan.
For example: Let’s say you take out a $500 loan with a 25% APR and a 10-month term. Your monthly payment would be about $55.91. By the time you pay off the loan, you’ll have repaid the $500 plus about $59 in interest. However, if you were to pay off the loan after just one month, your total interest cost would be just $10.41.
On the other hand, if you were to borrow $500 via a payday loan, you could be charged $75 ($15 per $100). The $575 would then be due within two to four weeks. If you couldn’t repay the full amount on time, payday loan lenders often charge additional fees to extend your payment terms.
When compared over the same loan term of four weeks, the personal loan is significantly cheaper than the payday loan. However, personal loans also give you the option to split up the cost over a longer repayment term. Longer terms make the payments more affordable but often result in higher overall costs.
See Also: What Credit Score Do I Need to Take Out a Personal Loan?
Alternative options to get $500 fast
Not sure you want to take out a $500 loan? There are other ways to come up with money quickly. For example, you can ask a family member or friend if you can borrow $500. They may lend it to you interest-free and be more flexible with the repayment terms.
Another option is to go through your belongings and see if there’s anything of value you no longer need. You can then sell it via Facebook Marketplace, Craigslist, or a garage sale. You can also look into federal financial assistance programs. If you qualify, the government can help you pay for food, housing, utility bills, and more.
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