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KEY POINTS
✔ A R500 loan is a small loan with a short repayment period.
✔ You can usually get a R500 loan from a payday lender.
✔ R500 payday loans often have high-interest rates and fees.
✔ It’s recommended to pay off payday loans early to lower costs and avoid late payment fees.
✅ How Much Do You Need?
It’s estimated that 76% of South Africans run out of money before month end1. Many South Africans resort to borrowing, and sometimes a small loan of R500 can save the day.
The good news is that you can apply for cash loans in South Africa with RandWallet. It’s quick and easy. Here you can find the best loans for R500, learn what you need to apply, and how to complete the online application process.
R500 Loan: How It Works
A R500 loan is classified as a very small, short-term loan with a quick repayment period. Here’s a representative example from two short-term lenders to help you understand how a R500 cash loan works.
- Lime Loans. Lime24 allows you to borrow R500 for up to 37 days. If you borrow this amount for 30 days, you must pay back R 730.71. The interest rate per day is 0.16% for new borrowers and 0.10% for existing borrowers. Fees include an initial fee and a monthly service fee.
- Boodle Loans. If you borrow R500 from Boodle, the maximum repayment term is 25 days. Your interest and fees will be R170.38, so you have to pay back a total of R670.38. The daily interest is set at 0.17%, and charges include a monthly service fee and an insurance premium.
Pros of R500 Loan
✔️Easy online application. You can apply for a R500 loan in the comfort of your own home via a fast, easy online application process. Additionally, it’s easier to get approval, probably because such a small loan carries little risk for the lender.
✔️Quick disbursement. Looking for R500 instant cash loans? When you apply, it’s possible to get quick access to funds. This can be a lifesaver if you have an urgent expense.
✔️A small loan can be easy to manage. A R500 loan can be great if you need a little extra cash to cover a short term cashflow gap. This small loan is easier to repay compared to any larger loan.
Cons of R500 Loan
❌Can be expensive in the long run. A R500 quick cash loan can be handy, but this type of loan is usually a payday loan with a high interest rate and expensive fees. It’s important to pay the debt as early as possible and avoid rolling it over into a new loan. Otherwise, you may end up paying back more than you borrowed.
❌Not all lenders offer small loans. Borrowers may have no choice but to use a payday lender because traditional banks and lenders usually don’t offer small personal loans below R2000.
Types of R500 Loans
There are two main options for borrowers looking for loans for R500:
Payday Loans
Payday loans, sometimes called cash advance loans, are the most common option for small loans. These loans typically have short repayment periods. It’s safe to expect a repayment period of not more than 30 days for a R500 loan.
If you’re thinking of taking out a payday loan, it’s important to only deal with a registered lender. This can protect you from predatory lenders charging extremely high interest rates and fees. These types of lenders often advertise no credit check loans to attract borrowers.
Personal loans
Personal loans tend to have longer repayment periods and lower interest rates than payday loans. Unfortunately, it’s almost impossible to get a personal loan for such a small amount.
Besides payday and personal loans, you can also explore other unsecured loan options, such as a bank overdraft or a 0% interest credit card.
What Can You Use a R500 Loan For?
A R500 loan may be small, but it can still go a long way towards covering the following expenses:
- Electricity and other utility bills
- Transport
- Fuel
- Mobile airtime
- Scan to pay in shops
- Groceries and other essentials
- Other expenses like medical bills, car repairs, and more
What Are the Requirements for a R500 loan in South Africa?
Lenders may have different requirements, but you generally need the following to qualify:
- You should be at least 18 years of age
- Proof of payment e.g. the latest bank statements and payslips
- A valid South African ID
- Valid and active bank account
How Do I Get a Loan for R500?
Complete the following steps to apply for a R500 loan online:
Step 1 – Fill in the online application form. You’ll usually be asked how much you need. You’ll also have to provide your personal and financial details.
Step 2 – Compare offers. Once you submit your application, the lender will carry out a credit check, and you’ll get an offer if you qualify. Borrowers with a poor credit history may also qualify. If you apply via a loan broker like MyLoan or Arcadia Finance, you may get multiple offers all at once. You can then compare these offers to find the best loans for R500.
Step 3 – Finalize the process. One of the last steps is to upload the required documents, such as recent bank statements or payslips showing your income.
Step 4 – Get funded. You must sign the loan contract before the money is deposited in your bank account. Read the contract carefully, so you know exactly what you’re getting into. Once you sign the dotted line, the lender will deposit the money into your bank account. You’re free to use the funds for any legitimate purpose.
Other Cash Loan Amounts
Frequently Asked Questions
You can apply for a R500 loan via RandWallet for free. We have partnered with many South African lenders. All you have to do is complete a single online application and get multiple offers if you qualify.
Some lenders offer instant loans if you’re a returning client and if they have already verified your information.
Additionally, some lenders like Lime Loans and Boodle advertise that they’ll pay the money into your account within minutes of getting approved. If you need a quick loan, the best thing is to apply online and ensure your details are accurate for fast processing.
If you have a low credit score or poor credit history, your best bet is a payday lender. You’re more likely to get approved for a payday loan because of the high interest rates and fees.
This reduces the risk for the lender, so they’re more willing to offer you a loan. Even if R500 is considered a small amount, it’s still important to only borrow what you can afford to avoid further damaging your credit score.
Here’s a representative example: If you borrow R500 over 30 days, you’ll have to repay R 730.71. This includes interest and fees, such as an initiation fee and a monthly service fee.
When you apply with RandWallet, you only have to fill in a single application form. It’s possible to get multiple offers if you qualify. Simply compare these offers and accept the option you feel is best for you.
Many lenders require proof of income documents, even for such a small loan. So, you may struggle to get a loan if you’re unemployed.
1News24, 76% of South Africans run out of money before month-end, Published July 2023. (Read here)
Our Research Expert
Gracie Makowe is a full-time personal finance writer with 10 years of experience and a Bachelor of Commerce in Financial Management from UNISA. Learn more.