Facts people with bad credit should know about getting $500 loan today

Banks may not offer loans to people with bad credit. However there are many lenders who provide short-term, small dollar (from $200 up to $2500) loans to individuals who have steady employment but have bad credit. The application process is quick and simple; borrowers just need to visit the lenders website, fill an online form with personal and financial details and other relevant information, and then wait for the lender to transfer the funds to your bank account, on the same day or within 1 to 2 days.

Listed below are some of the pros and cons of such short-term loans.

Pros of loans for people with bad credit

Lenders of such $500 loans do not ask for any security or collateral. All that is needed is proof of a steady source of income, whether it is from a job or business or pension or government disability checks. Lenders will process the loans quickly after such proof (in the form of bank record, utility bills) is provided by the borrower.
Borrowers do not need to pay any brokerage or commission to any agent or middle man as they can directly contact the lenders. There are also many websites that offer comparison of rates and fees offered by different lenders in the market. Thus, borrowers can select a lender who best fits their needs and budget.
Such loans are perfect for emergency situations like medical bills, car repair, etc. These $500 loans are designed to offer emergency funds to people with regular income, even if they have bad credit.
The repayment of the loan is easy and the term is just for a few weeks or a month or two. The payment is auto-debited from the bank account of the borrower to the lender on the due date. Thus, borrowers do not have to worry about late payment charges, penalties, or extra fees.

Cons of $500 loans for people with bad credit

Since lenders do not ask for collateral for $500 loans before approving them, they often charge high rates of interest, fees, and other charges. The rate may be higher especially if the borrower has bad credit.
Due to the high interest rates and steep fees, such $500 loans can result in a debt trap. If repayment is not done on time then the added interest and fees can spiral out of control resulting in debt that borrowers cannot handle. It is therefore advisable to make the payments on time to avoid excess interest and other penalties.
Most of the lenders of $500 loans offer their services online and some of them can be dishonest. Hence, borrowers have to be careful about the lender they contact to get a loan. It is recommended to borrow such loans only from licensed and registered lenders. You can find all relevant information about the lenders by researching over the internet or visiting the website of the State Department of Financial Institutions.