How to get a $500 loan

There are many places to get a $500 loan, but some are more expensive than others. For example, a $500 payday loan can have excessive fees (such that they're banned in some states), while some $500 cash advances can be nearly free. Since costs can vary considerably, it’s important to understand your options when it comes to getting a $500 loan.

Where to get a $500 loan

Some of the best ways to get $500 when you need it include personal loans, payday alternative loans, credit card cash advances, and cash advance apps.

Personal loans

A $500 personal loan might be hard to find, as few lenders offer personal loans below $1,000. PenFed is one that gets close, for example, offering personal loans as low as $600. But a personal loan may still be a good option to borrow $500 if you can use the excess loan amount to pay down other debt.

The average APR on a 24-month personal loan was 12.35% in November 2023, while the average credit card APR was 21.47%, according to The Federal Reserve. In other words, you could potentially use a personal loan to pay off credit card debt and get a lower rate and lower monthly payments, plus the $500 you need.

What also stands out about personal loans are the repayment periods available. Unlike most other $500 loan lenders, personal loan terms can extend from one to seven years (or more). 

A longer repayment term translates to lower, more affordable monthly payments. This is another reason personal loans can be a smart choice for consolidating high-interest debt — in addition to getting the $500 you need.

You can typically get a personal loan from banks, credit unions, and online lenders.

Cash advance apps

Cash advance apps offer small loan amounts, typically up to $500 or more, depending on the provider. Repayment is due by your next payday, and most apps don’t check your credit score. 

Standard fund transfers may be free and take one to five business days, depending on the app, while express transfers can be deposited in seconds or minutes for a fee. But this is where cash advance apps can get expensive.

For example, Dave charges a 5% express transfer fee to an external account. Based on a $500 loan amount that’s repaid over two weeks, that comes out to a 130% annual percentage rate (APR). For comparison, most personal loans have APRs that max out around 36%.

Fees may also include optional tips, which further increases the APR. Avoid express or expedited fund transfer fees and optional tips to keep cash app costs low.

Credit card cash advances

If you have a credit card, you may be able to withdraw $500 in cash at an ATM or bank, get it transferred to your bank account, or write a check. Credit card cash advances usually have additional fees and higher APRs than standard card purchases. 

Upfront fees can be from 2% to 5% of the transaction amount, or charge a flat minimum, whichever is more. Plus, interest charges begin to accrue immediately on cash advances. (Interest isn’t typically charged on standard purchases until a 21 to 25 day grace period has passed.)

It’s also worth noting that you may have a lower cash advance limit than your overall credit limit.

Payday loans

Payday loans may be a tempting option if you want to borrow a small amount quickly. But they can be very expensive. The Federal Trade Commission reports that APRs may be 390% or higher. Payday loans are repaid by your next payday, usually within two to four weeks and often don’t require a credit check. 

The payday lender may deduct the full amount owed from your bank account on the due date (with your advance authorization) or may require a post-dated check in person.

Related: No-credit-check loans

Due to their predatory nature, 26 states have banned payday loans altogether. Exhaust other options before considering a payday loan.

Payday alternative loans (PALs)

Payday alternative loans, or PALs, were designed to be an affordable option to payday loans. Offered by federal credit unions, these loans have a maximum interest rate of 28%. There are two types available:

• PALs I offer loan amounts from $200 to $1,000 with terms of one to six months. You must also be a member of the credit union for at least one month to qualify.
• PALs II max out at $2,000 with no minimum loan amount. They offer repayment terms of one to twelve months. You must be a member of the credit union to qualify, but there is no waiting period.

Related: Where can I get a personal loan?

Personal loan lenders that offer $500 loans

Here are four personal loan lenders that offer $500 loans (or get close):

• PenFed: PenFed offers loans as low as $600 in as soon as one business day of approval, with APRs that max out at 17.99% and repayment terms up to five years. But you’ll need good credit to qualify.
• Personify Financial: Personify offers personal loans for $500 in 23 states, with APRs ranging from 19% to 179.5%, including a 5% origination fee. Repayment terms as long as four years are available. If you don’t need a years-long repayment term and have bad credit, a fee-free cash advance could be a better option.
• Oportun: Oportun offers personal loans for $500 with APRs that max out at 35.99%. Repayment terms may vary by state, but generally range from 12 to 15 months.
• First Tech: First Tech, a credit union, offers $500 loans with no origination fees, rates as low as 9.29%, and a 24-month repayment term. You’ll need to become a member of the credit union, but there are multiple ways to qualify.

Check Out: Best Personal Loans

How much can a $500 loan cost?

How much a $500 loan costs depends on multiple factors. Here are the biggest ones that contribute to the loan’s APR:

• Fees: Watch out for lenders that don’t express loan costs in APR. Many lenders charge fees that can be very high relative to the amount borrowed and repayment term, whether that’s a fast funding fee for a cash advance or payday loan fees. Use a short-term loan calculator to compare APRs across the options available to you.
• Interest rate: Longer-term loans tend to charge interest rates as opposed to fees alone. The rate you qualify for will depend on the lender, your credit score, your financial profile, and other factors. Prequalify for personal loans online to compare rate estimates before applying. Doing so won’t hurt your credit, but formally applying for any loan may ding your score, usually temporarily.
• Your credit score and history: The higher your credit score, the lower APRs you may qualify for, and the more loan options you’ll have available.

Check Out:

• Average Personal Loan Interest Rates
• Best Personal Loan Rates

$500 loan example

For example, let’s say you take out a $500 loan with a 27.00% APR, and a one-year term. You would pay about $76 in total interest and $48 per month, for a total repayment of $576.

But if you were to get a $500 payday loan, the cost would be much higher on a weekly basis. Fees for payday loans range from $10 to $30 for every $100 borrowed, depending on your state. Let’s say your fee is $20 per hundred ($100 for a $500 loan), and the amount is due in two weeks. You would pay $600 which equates to a 521% APR. If you can’t make the payment, you’d likely be charged additional fees to extend your repayment, further adding on to your costs.

A small personal loan is usually a much better and more affordable option than a payday loan.

How to apply for a $500 loan

While the application process can vary based on the type of loan and the lender, these are the basic steps to expect:

1. Check your credit score: Before applying, pull your credit score and check your credit reports for errors that could be bringing it down. Visit AnnualCreditReport.com for a free credit report, and report errors with the credit bureau showing them.
2. Prequalify for multiple loans: Many lenders allow you to prequalify for loans without any impact to your credit score, so prequalify to see the terms each lender is prepared to offer you. Keep in mind that prequalification is not an offer of credit, and your final rate may be different.
3. Compare offers: Compare APRs, repayment terms, and monthly payment amounts to find the lowest-cost option that you can comfortably afford.
4. Complete your application: Once you apply for the loan, the lender will perform a hard credit pull, which can ding your score temporarily. You may also have to submit documentation, such as proof of identity and proof of income.
5. Prepare for repayment: Once your loan is approved and you’ve received the funds, set up calendar reminders of your monthly payments. Since on-time payments can make up a large part of your credit, staying on top of your payment schedule can help raise your score or keep it high.

Other $500 loan alternatives

If none of these options seem right for you, there are some alternatives you might consider.

• Family or friends: If you have a loved one that can lend you $500, it may be worth asking. If they agree, draw up a repayment plan and stick to it.
• Side gig: If the expense isn’t time-sensitive, it can be worth saving up the money instead. This eliminates the cost of borrowing entirely. Apps like Uber, Instacart, or Rover often boast a fast and easy approval process for new workers.
• Government assistance: Some government assistance programs can help you pay for things like rent, utilities, and groceries. You can also contact 211 for local resources and community assistance in your area.

$500 loan FAQ

Can you get a $500 loan with bad credit or no credit?

Yes, you may be able to get a $500 loan with bad credit or no credit history. Seek out lenders that consider additional factors, such as income or employment history. If you're a member of a credit union, you may be able to get a payday alternative loan, which are designed for credit-challenged applicants. Cash advance apps, many of which don’t check user’s credit scores.

Check Out: Best Loans for Bad Credit

How can I get a $500 loan quickly?

Many lenders offer fast loan funding times as soon as the same or next business day. Find lenders with quick application and decision processes and ask about their disbursement timelines to ensure you can get your funds in time. Just make sure you aren’t overpaying for fast cash via a cash app or payday loan.

Read More:

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• Best hardship loans for bad credit
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• Best personal loans for fair credit
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• How to get a loan with a 500 credit score
• How to get a loan if you're unemployed
• How to get a $2,000 personal loan