There are times when unexpected expenses come up and you don’t have enough savings to cover your bills. If that happens, it’s best to remedy the situation before it affects your credit and finances. For example, taking out a small loan could be an easy solution, if you know where to look. Keep reading to find out how you can get a small $500 loan in Canada.
Where Can You Get a $500 Loan In Canada?
Before you apply for any type of loan, remember to do your research and choose a reputable lender who has a valid business license. Luckily, in Canada, there are a few different places where you can apply for a $500 loan, including the following:
Personal Loan Lenders
While some banks offer small loans, they often have tough requirements and larger minimum borrowing amounts. So, depending on your financial situation, you may want to get your $500 personal loan from an alternative or private lender, who often has more flexible requirements.
- Varying Interest Rates – Personal loans from private lenders typically come with interest rates between 5% – 46.96% APR.
- Bad Credit May Be Accepted – Some lenders will approve you for a $500 loan with poor credit, as long as you meet their other requirements such as income level.
- Flexible Payment Plans – Personal loan terms can vary between 6 to 60 months, which can lead to affordable payments.
- Range Of Loan Amounts – If you have good credit and a decent income, you may be able to borrow more than a $500 loan (up to $35,000 or more in some cases).
You can also apply for a $500 loan through a payday lender in Canada. They typically offer loans between $100 – $1,500, but they have extremely high fees and interest rates. As such, they should only be used as a last resort or when you know with absolute certainty that you can pay it back by the due date.
- Sky-High Costs – As mentioned, payday loans can come with extremely high fees and interest rates ranging from $15 to $60 per $100 borrowed, depending on the province you live in.
- Shorter Payment Plans – Most payday loans must be paid off after 2 weeks (i.e. by your next payday) but some lenders offer terms lasting up to 60 days.
- Bad Credit is Accepted – Most payday lenders won’t perform a credit check, so getting a $500 payday loan with bad credit is possible.
- Fast Funding – If you pass the income and personal requirements, some payday lenders will deposit your loan into your bank account the same day you apply.
How To Qualify For A $500 Loan In Canada
Whether you apply for a $500 loan with a personal loan lender in Canada or a payday lender, there are certain requirements you’ll need to meet, including:
- Being past the age of majority in your province or territory (18 or 19 and up).
- Being a citizen or permanent resident of Canada.
- Having a reasonable income and an active bank account
Every personal loan lender has different approval requirements. Their eligibility criteria will generally be tighter than those of a payday lender and may include:
- Income And Employment Requirements – Earning a steady income from credible employment. Some personal loan lenders will accept other forms of income such as employment insurance, pension, CCB and other government benefits.
- Credit Score – While some personal loan lenders will have a minimum credit score requirement of around 560 – 600, others may accept those with bad credit.
- Debt – Having a reasonable payment and debt history (generally applicants must be discharged from any consumer proposals, bankruptcies or other debt collection procedures).
The eligibility criteria for payday loans are minimal and often don’t require a credit check, which makes it ideal for those with poor credit.
- Income Level – One of the main requirements for a payday loan is your income. So long as you meet their minimum monthly income requirement of $1,000 – $2,000, you will likely qualify. Most payday lenders accept alternative forms of income like disability payments, self-employment income, and government benefits.
How Much Does A $500 Loan Cost?
Here’s how much it costs to borrow from a payday lender versus a personal loan lender:
$500 Payday Loan Cost
|Province/Territory||Max Cost Per $100 Borrowed||Cost of a $500 Loan for a 14-day term||Cost of a $500 Loan for a 30-day term|
|Quebec||35% AIR (Annual Interest Rate)||$506.71||$514.58|
Prince Edward Island
|Newfoundland & Labrador||$21||$605||$605|
$500 Personal Loan Cost
|3 Month Loan||6 Month Loan||12 Month Loan|
|Total Interest Paid||$20.55||$67.64||$84.92|
Steps To Apply For A $500 Loan
Different lenders also have different approval and funding procedures. That said, here are some common steps you should take when applying for a $500 loan in Canada:
Get Quotes And Compare
Make sure to research lenders and compare prices to find a business with a solid reputation and affordable loan conditions. A good lender should offer you a free price quote on their website or over the phone.
Gather Documents And Apply
Once you find the right $500 loan, gather any relevant documents and prepare to apply (most people do this online nowadays). Lenders might request these documents to confirm your identity and income:
- A piece of government photo ID (passport, driver’s license, etc.)
- Your latest bank statements and income/pay stubs (from all sources)
- Other proof that you have a Canadian address (utility bills, etc.)
Wait For A Reply
Applying for a $500 loan won’t take long but response times can vary. If it’s done online, some lenders will send you confirmation within a few hours, others may take 1 – 2 days or even longer on weekends and holidays.
The same goes for funding times. Payday loans can be deposited on the day you apply, while personal loans may take a couple of business days, depending on the lender and if you’re required to submit further documents or information.
Other Ways To Get $500
Whether it’s due to the costs or conditions, there’s always a chance that a loan isn’t the right product for your lifestyle. Don’t worry, because there are plenty of other affordable and convenient ways to get a $500 loan in Canada, including but not limited to:
- Overdraft – Some credit cards and bank accounts will allow you to withdraw past your credit limit in exchange for a penalty (typically a percentage of the amount in overdraft, charged monthly). It’s not ideal but paying overdraft fees or buying overdraft protection can sometimes be cheaper than taking out a loan.
- Cash Advance – Certain credit cards may also provide cash advances. Although this can involve high-interest rates (even higher than a card’s borrowing rate in some cases), it might still be safer than a loan (particularly a payday loan).
- Ask Family or Friends – If you can’t qualify with a lender or you’re uneasy about giving them your information, maybe borrowing from a trusted family member or friend is best (as long as you can pay them back within a reasonable period).
- P2P Lending on Reddit – Launched in 2014, r/borrow is a subreddit that helps Reddit community members acquire short-term funding. Individuals borrow from other individuals, which can make for a faster and simpler lending experience.
Do Lenders Offer Instant Approvals?
Whether you apply with a payday lender or a personal loan lender, you can find one who offers instant approvals almost anywhere in Canada. Some payday lenders will not only provide instant approvals, but they can fund you within minutes after approval via e-transfer. While they are an expensive option, these e-transfer payday lenders are great if you need a small amount of cash immediately.
Can I get a $500 loan without a credit check in Canada?
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