Question: I need $500 and really don't want to go to a bank to try to borrow it, because my credit score isn't good and I just don't like the idea of having them look at my credit report. Is there a better way that's more private? Can I borrow $500 over the internet without a credit check? --Finn, Provo.
Answer: A $500 internet loan with no credit check is possible. There are lenders who allow borrowers to get money fast, without needing to get approval from a bank, go through a credit check, have a high score, or visit a loan officer in person. For those who need quick financial assistance, such loans are very useful, though one must be sure to budget enough to pay them back on time, because fees for extensions are expensive.
A lender may offer $500 to be paid back in a lump sum on your next payday, in two to four weeks, or offer an installment loan which you can pay back in smaller amounts over several months or a year.
Search for online loans or payday loans, and you'll find a number of places willing to help, some with guaranteed approval for those who meet minimum requirements. Because such loans are relatively easy to get over the internet, they can be tempting for those who want money for casual reasons. Make sure you're in extreme need and have no other way to get it before agreeing. The cost to borrow $500 until your next payday might be around $15 per hundred, or $75 total, with additional fees if not paid back according to the agreed-upon schedule. If you're at risk for late fees on other bills or bouncing a check, the cost may be well worth it, as long as you don't get caught in the trap of extending the loan by paying only the fee again on your next payday, and not the principal.
Even so, a $500 loan from a no-credit-check lender will be expensive compared to other sources of funds, since the lender is taking a higher risk by not accessing your credit score. Consider other places to get funds, such as borrowing from relatives or contacting creditors directly to see if you can work out a payment plan. If the funds are for something which could be delayed, such as a vacation, new TV, or other item that you could save up for, a better choice might be to put off spending the money until you've put aside enough to pay cash for the item.
If the $500 is for an emergency, and you need assistance to obtain it immediately, an internet loan may be the only option. Approval is fast, usually within a few minutes or a few hours at most, and the money will generally be deposited into your checking account electronically, on the next business day. That's why one requirement is having a checking account--so the money can be wired directly to your bank (also called an ACH deposit, the same way paychecks are direct-deposited).
Repayment will happen the same way, with funds sent by ACH to the lender. Work out a budget as soon as you receive the money so you'll be able to pay it back on time. If you apply through a website which sends your application to a variety of lenders, you may be approved by more than one and can make a choice of which, if any, to accept. That can be helpful not only in choosing the one with the lowest cost, but also the one with the best repayment terms. Whether you need to pay the whole amount back at once, or in installments, pretend that money is already gone and budget with what's left. It may be tempting to just pay the minimum amount and extend the loan, but it will cost you much more in the long run.
They'll still look to see if you have other outstanding internet loans, even if they don't do a "real" credit check. I found that out the hard way. I guess they don't care if you're behind on your mortgage or whatever, but they don't like it if you already have a payday loan out. --anon
Can you get approved if you don't have a paycheck income, but still get money regularly? --J.K.
Yes, what most internet lenders are looking for is your ability to repay. If you have disability, Social Security, unemployment, or other income coming in regularly, especially if they're direct-deposited to your checking account, that will generally be just as acceptable as a paycheck from a job. --John Baker, Loanwhere
Is $500 like a maximum, or a minimum, or typical? How much can you borrow? --River66
$500 is probably a typical average amount. It would depend on one's income, with a maximum being around $1,500 to $2,000 for a first-time borrower. Once a company has a positive experience, and you pay a loan back on time, they may be willing to lend more in the future, if you have enough income to cover it. For those with lower income, a first-time loan might be as small as $100 to $200. Even if you're approved for a higher amount, don't borrow more than you need. --John Baker, Loanwhere