R500 loan: what it costs and how to get one

A R500 loan is short-term credit. Under the National Credit Regulations, a lender can charge up to 5% interest per month on a first short-term loan, an initiation fee capped at 15% of the amount for small loans, and a monthly service fee. That means a R500 loan repaid after one month can cost roughly R650 or more in total, so fees are a large share of such a small loan.

What lenders check

• Payday date and income
• Existing short-term loans
• Identity and bank account

Documents you'll need

• ID document
• Latest bank statement or payslip

Watch out for

• Fees on tiny loans are high relative to the amount — check if your bank offers an overdraft or advance.
• Rolling a R500 loan over month after month gets expensive fast.
• Only borrow if you're sure you can repay on payday.

Can I get R500 with bad credit?

Small amounts are sometimes approved with weaker credit if your income is regular.

How fast does R500 pay out?

Often the same working day once approved.

Is a R500 loan worth it?

Only for a genuine emergency. Compare with an employer advance or a payment arrangement first.

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