
Having access to £500 loans can help you cover unplanned expenses, spreading the cost with manageable monthly repayments. It’s ideal for those needing to cover mid-range costs, such as household items, emergency repairs, or essential purchases like a new mattress.
The Several Types of £500 Loans You Can Choose From
- Short-Term Loans
Short-term loans are a popular option for borrowing £500, allowing you to spread the repayment over several months. This makes managing your monthly budget easier with smaller monthly repayments.
- Payday loans
If you know you can afford to repay the full amount quickly, payday loans are typically spread over a few months, but with higher interest rates.
- Guarantor Loans
A guarantor loan allows someone with a stronger credit history to co-sign the loan. Both you and the guarantor need to demonstrate the loan’s affordability through income and expenditure forms.
- Personal Instalment Loans
Some lenders offer personal instalment loans, where borrowers can repay the £500 loan in fixed monthly payments over a longer period, such as six to twelve months. This is ideal if you want to spread out the cost without repaying in a really short period.
What Can a £500 Loan Be Used For?
As a personal loan, a £500 loan can be used for any purpose, whether it’s planned or an emergency expense. One practical example is purchasing a new mattress. According to the Original Bed Company, a mid-range mattress can cost between £500 and £1,000, making a £500 loan a good way to finance part or all of the purchase of a mid-range mattress without putting strain on your savings or credit card.
A new mattress is an essential item, and this type of loan can help cover the cost if you don’t have enough credit available elsewhere. You could opt for a short-term loan to spread the cost over several months, ensuring that repayments fit comfortably within your budget.
Thin Credit Histories: What It Means and How It Affects You
Many people believe that a bad credit score is a result of missed payments or defaults, but this isn’t always the case. Some people have what’s known as a thin credit history, meaning they’ve had little to no activity on their credit report in recent years. This is common for:
- Expats returning to the UK: If you’ve been living abroad for several years, your UK credit history might no longer reflect any recent activity, making it difficult for lenders to assess your reliability.
- People who haven’t used credit in the past six years: If you haven’t taken out any loans or credit cards, or if you paid off your credit and haven’t used it recently, your credit history may be too sparse for lenders to approve you easily.
In these cases, lenders may view you as a higher risk, even if you haven’t missed payments or defaulted on credit or loan agreements. Guarantor loans or short-term loans from specialised lenders can help you access the credit you need while building up your credit history over time.
How to Apply for a £500 Loan
- Review the Eligibility Criteria
To apply for a £500 loan, most lenders will require you to:
- Be at least 18 years old
- Be a UK resident
- Have a stable income
Lenders may also accept those who are self-employed, work part-time, or receive benefits like Universal Credit. Always check each lender’s specific eligibility criteria.
- Have the Necessary Documentation Ready
You’ll typically need:
- Proof of identification (passport or driving licence)
- Recent bank statements
- Income verification (whether from employment, self-employment, or benefits)
With your documents ready, the rest of the application is easy…
- Complete the online application, including your personal and financial details.
- Submit the necessary documents, such as proof of ID and income.
- Lenders typically respond quickly, with many offering same-day loans for urgent needs. In most cases, the funds can be transferred within hours.
FAQs
Can I get a £500 loan if I have a thin credit history?
Yes, many lenders offer loans to people with thin credit histories, particularly through guarantor loans or short-term loans designed for people without extensive credit activity.
How fast can I get a £500 loan?
Many lenders offer quick loans, which can provide access to funds within hours, especially if you apply early in the day.
Can I get a £500 loan if I’m self-employed?
Yes, self-employed individuals can often qualify for a £500 loan, as long as they can demonstrate a stable income and meet the lenders’ eligibility criteria.