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What is a $500 payday loan?

A $500 payday loan is a short-term loan that can be quickly approved and quickly paid out to you - but which comes with high fees.

Australians generally use $500 payday loans to cover pressing expenses, such as rent or an electricity bill.

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What is a $500 bad credit payday loan?

A $500 bad credit payday loan is a short-term loan that is available to people with bad credit histories.

Lenders generally prefer to deal with borrowers who have good credit histories, because they’re considered to be more likely to repay the loan and therefore less of a risk. However, there are some lenders in Australia that will issue $500 payday loans to people with bad credit.

Who offers $500 payday loans?

If you want a $500 payday loan, you’ll have to speak to a smaller provider that you may not have heard of, rather than a well-known lender. Banks and credit unions generally avoid payday lending; instead, it’s done by smaller non-bank lenders, which are often online-only providers.

How do you take out a $500 payday loan?

The most common way to apply for a $500 payday loan is over the internet. Generally, the payday lender will want to gain an understanding of your identity and financial position, and so will ask for your name, date of birth, address, driver’s licence number, employment details and income.

How long does it take to get a $500 payday loan?

Depending on the lender, your $500 payday loan application may be assessed and paid out within minutes. However, depending on your bank, it might take a couple of business days before the money lands in your account.

How much will a $500 payday loan cost?

Payday lenders aren’t allowed to charge interest. Instead, they make money by charging fees - which are usually steep. These fees may include:

  • A one-off establishment fee of up to 20 per cent of the loan amount
  • A monthly account-keeping fee of up to 4 per cent of the loan amount
  • A government fee
  • A penalty fee if you default on the loan

What are the pros and cons of $500 payday loans?

$500 payday loans are a double-edged sword: they’re designed to quickly solve a problem - but at a high price.

If you need money in a hurry, a $500 payday loan might be suitable, given that your application could be assessed and authorised within minutes.

However, that quick money would come with high fees attached - so high that the cost of ‘buying’ the money might be equivalent to paying an annual interest rate of more than 700 per cent.

Repayment scenarios for a $500 payday loan

Here’s how much you’ve have to repay if you were charged the maximum 20 per cent establishment fee and maximum 4 per cent monthly fee:

  • 1-month loan term = $620
  • 2-month loan term = $640
  • 3-month loan term = $660
  • 4-month loan term = $680
  • 5-month loan term = $700
  • 6-month loan term = $720

Can you get a $500 payday loan if you're on Centrelink?

Some lenders will give you $500 payday loans if you’re on Centrelink benefits - even if you have bad credit.

However, you can’t assume that all payday lenders will be willing to issue loans to people on Centrelink benefits, because each lender has its own policies. Also, even when lenders are willing to lend to Centrelink recipients, they might only do business with select individuals based on their unique financial circumstances.

Can self-employed people get $500 payday loans?

Yes, some lenders are willing to give $500 payday loans to people who are self-employed. Typically, self-employed borrowers are regarded as riskier, because their income seems less reliable. However, there are some payday lenders that take a more open mind to self-employed borrowers and are willing to give them loans.

What are some alternatives to $500 payday loans?

There may be cheaper alternatives to $500 payday loans, including free financial counselling, the No Interest Loans Scheme. You might also want to speak to the National Debt Helpline.

Payday loans are an expensive way to solve a problem, so while a $500 payday loan might be suitable to some people in some circumstances, you should think carefully before proceeding.