It’s easy to feel like you could really use some extra cash between paydays, and sometimes real financial emergencies strike at the most inopportune times. Many companies capitalize on these situations and solicit your business, offering you cash today with no credit check. Is what these companies say true, and can you really solve your financial problems by getting a 500 loan from a payday or cash advance lender? To answer these questions, it might be helpful to consider why you are seeking the loan, how much it will cost you, and whether it is meant to be a one-time fix, or a long-term solution.
The first thing you must consider is that the cost of a high-interest short-term loan, such as a 500 payday loan, makes it a very bad idea if you are thinking of borrowing the money for something other than a dire and immediate emergency. There are many other ways to pay bills, or buy something you want or need. The best thing to do is save up for the item you need, or to work out a payment plan with the person or company you owe money to. Even if you must borrow money, you might consider a paycheck advance from your employer, a small personal loan from a credit union, or even a credit card advance (which is not cheap, but probably cheaper than a payday loan).
How much will a 500 dollar loan cost you? This will depend upon the lender you choose and where you live, but a representative fee for a two-week loan of $500 is $85. This is a staggering APR of 443%.
If you think that sounds bad, think about what might happen if you cannot pay back the loan on time and are forced to “roll over” your loan. You will have to pay the fees all over again. This has caused some people to get caught in a serious cycle of debt with disastrous financial implications. Payday lenders assert themselves that their services are not meant to be a long-term fix. Yet, many of their customers return again and again, never pulling themselves out of their circumstances. If you are seeking a long-term solution to your financial crisis, think instead of spending less than you earn, fixing your bad credit, creating and living within a budget, and avoiding the payment of unnecessary interest on borrowed money.
Getting a $500 loan may be easy and fast, but it is also expensive and dangerous. Consider the urgency of your need and your other options before making a decision.