{“menuItems”:[{“label”:”Can you get a loan with a credit score of 500?”,”anchorName”:”#can-you-get-a-loan-with-a-credit-score-of-500″},{“label”:”1. Installment loans”,”anchorName”:”#1-installment-loans”},{“label”:”2. Payday loans”,”anchorName”:”#2-payday-loans”},{“label”:”3. Car title loans”,”anchorName”:”#3-car-title-loans”},{“label”:”4. Pawn shop loans”,”anchorName”:”#4-pawn-shop-loans”},{“label”:”5. Pay advance”,”anchorName”:”#5-pay-advance”},{“label”:”6. Credit card cash advance”,”anchorName”:”#6-credit-card-cash-advance”},{“label”:”How to increase your chances of loan approval with a credit score of 500″,”anchorName”:”#how-to-increase-your-chances-of-loan-approval-with-a-credit-score-of-500″},{“label”:”How do I get an emergency loan with a credit score of 500?”,”anchorName”:”#how-do-i-get-an-emergency-loan-with-a-credit-score-of-500″},{“label”:”Before you apply for a high-interest loan with a credit score of 500″,”anchorName”:”#before-you-apply-for-a-high-interest-loan-with-a-credit-score-of-500″},{“label”:”Frequently asked questions”,”anchorName”:”#frequently-asked-questions”}]}If you’ve got a low credit score of 500, getting a loan from a traditional lender is going to be extremely difficult. But the good news is that there are loans available for people with credit scores of 500. Keep reading to find out what they are and how to find a loan that’s right for you.Can you get a loan with a credit score of 500?Yes. Even if your credit score is far from perfect, there are loans for people with a credit score of 500. These loans are typically available from alternative lenders that specialize in loans for bad credit borrowers. However, watch out for steep interest rates.The most important factor to help you qualify for a loan if you have a credit score of 500 is having a steady income. Rather than focusing on your credit score, these lenders will assess your ability to pay back the amount you want to borrow. So if you’re in steady employment and you have a low debt-to-income ratio, your chances of approval will increase.1. Installment loansInstallment loans tend to have more lenient eligibility criteria than other personal loans, and you can pay back the money you borrow over terms ranging from 3 to 60 months. However, you’ll need to be prepared to accept higher interest rates than you would get on a conventional personal loan.Features of installment loans for credit scores of 500Loan amounts: Typically up to $5,000Loan terms: 3–60 monthsInterest rates: 18% – 46.96%Chances of approval: MediumWhat to watch out for: High interest rates will mean you need to repay much more than you borrow, while origination, prepayment, late payment and NSF fees may apply. You’ll also need to ensure that you’re dealing with a reputable lender.Compare installment loans for credit scores of 500Best installment loans in Canada2. Payday loansA payday loan offers fast access to financing – you can apply for a loan, get approved and access your funds all in the same day. You then have a very short time to pay back what you borrow, with a maximum loan term of 62 days. High interest rates also apply, so it’s worth considering payday loan alternatives first.Features of payday loans for credit scores of 500Loan amounts: $100 – $1,500Loan terms: 1 – 62 daysInterest rates: $15 to $25 for every $100 borrowedChances of approval: HighWhat to watch out for: It’s common for payday loans to have APRs of over 400%, so this type of loan is an extremely expensive way to borrow money. Short loan terms make it easy to fall into a cycle of debt, while it’s also essential to keep an eye out for scams and make sure you’re dealing with a legitimate lender.Compare payday loans for credit scores of 5003. Car title loansCar title loans are secured to the title of your vehicle. They allow you to borrow up to 50% of the value of your car and you can also take advantage of fast access to funds. And because you offer your car title as security, you can access higher loan amounts even if you have bad credit.Most car title lenders require you to take your vehicle in for an inspection before approving your loan, but some offer 100% online approval.Features of car title loans for credit scores of 500Loan amounts: $1,000 – $50,000Loan terms: 3 – 60 monthsInterest rates: 9% – 49%Chances of approval: HighWhat to watch out for: Read the fine print to find out about any fees and charges that apply to your loan, such as vehicle evaluation, title search and admin fees. Combined with the interest rate, this can result in a high APR. It’s also important to remember that the lender could repossess your car if you can’t repay the loan.Get a car title loan with a credit score of 5004. Pawn shop loansA pawn shop loan provides fast access to funds when you offer an item as collateral, such as jewellery, electronics or a musical instrument. You can borrow amounts up to 60% of the item’s resale value and then pay back your short-term loan (plus interest) to have the item returned to you.Features of pawn shop loans for credit scores of 500Loan amounts: Approximately 25–60% of the item’s valueLoan terms: Typically 30–90 daysInterest rates: 10–200+%Chances of approval: HighWhat to watch out for: High interest rates and short terms can make it difficult to pay back what you borrow. The pawn shop will sell your item and keep the profits if you can’t pay back the loan, while it’s also important to keep an eye out for any hidden fees, such as storage fees.5. Pay advanceA pay advance is a relatively new way to access emergency cash in Canada. Pay advance services allow you to access a small portion of your next paycheque to help you get through until your next payday. There’s no credit check required and some providers don’t charge any interest. It’s possible to access money on the same day in some cases, often for a fee, but funding may take up to three business days in normal circumstances.When it comes to paying back the loan, the pay advance service will typically automatically deduct the money from your bank account on your next payday.Features of pay advancesLoan amounts: Varies depending on the service, but typically around $100Loan terms: Repayment by your next paydayInterest rates: No interestChances of approval: HighWhat to watch out for: Check the fine print to find out what fees apply when you use the service, and also whether there are late payment fees. You’ll also need to budget carefully to make sure you can cover expenses once your repayment is deducted from your next pay.6. Credit card cash advanceA credit card cash advance allows you to access money from your card balance. You can get the cash you need from your bank or an ATM, but you’ll pay interest on the money you use and cash advances aren’t eligible for interest-free days. Compare cards with low cash advance rates to find an affordable option.Features of credit card cash advancesLoan amounts: Maximum daily limits are typically $500 or lessLoan terms: OpenInterest rates: Approximately 10.99–22.99%Chances of approval: Not applicableWhat to watch out for: Daily, weekly and monthly cash advance limits commonly apply, so you may not be able to access the amount you need. Cash advances also attract high interest rates. Interest starts accruing straight away, and you’ll need to pay a cash advance fee.How to increase your chances of loan approval with a credit score of 500There are a few simple things you can do to improve your chances of getting approved for a loan with a credit score of 500.Provide collateral. If you can provide collateral, such as your car, and apply for a secured loan, you’ll increase your chances of approval and also be able to access lower interest rates. Just remember that you run the risk of losing that asset if you fall behind on repayments.Get a cosigner. Applying for a personal loan with a cosigner, provided your cosigner has strong credit, can greatly increase your loan approval chances and help you get a better rate. But if you can’t make repayments, the cosigner becomes liable for paying off the loan.Avoid NSF transactions. Lenders will consider your income and existing debt to determine your ability to repay the loan. So if there are any NSF transactions on your account, this will make you look like a risky prospect to a lender. But if you don’t have any NSF transactions in the last 60–90 days, this will enhance your chances of loan approval.How do I get an emergency loan with a credit score of 500?All of the loan options listed above provide fast access to funds, but payday loans and credit card cash advances are the fastest.If you’ve already got a credit card, it’s easy and convenient to get a cash advance from your card. Just make sure you’re aware of the interest rate and cash advance fee that will apply to your transaction before deciding if it’s the right option.Payday loans allow you to get cash within an hour in some cases so you can take care of emergency expenses. But high APRs and short loan terms mean you should always consider a range of payday loan alternatives first.Before you apply for a high-interest loan with a credit score of 500Taking out a high-interest loan might seem like the best solution to your money troubles now, but it could have an even more detrimental impact on your finances in the long run. That’s why it’s a good idea to get in touch with a credit counselling agency before you take out a loan.A credit counsellor can sit down with you to assess your finances and your level of debt. They can advise you on the best way to get out of debt and provide tips on how to manage your money wisely.If you need help, visit 211.ca to get connected to the right support in your province or territory. From financial assistance and education to free or low-cost legal services, it’s easy to find the support you need.Frequently asked questions
How bad is a credit score of 500?
A credit score of 500 is near bankruptcy and is classified as poor. Find out about the credit score rating system in our guide to good credit scores.
Who offers loans for credit scores of 500?
Loans for credit scores of 500 are available from online lenders, pawn shops and pay advance services. Make sure you compare a range of options before deciding which loan is best suited to your financial situation.
Can you get a personal loan with a credit score of 500?
Yes, personal loans for people with credit scores of 500 are available from select alternative lenders that accept borrowers with bad credit. Be sure to compare loan APRs and terms, plus make sure you’re dealing with a reputable lender to find a loan that’s right for you.
