Home › Payday loan alternatives
Before you borrow
Payday loan alternatives that cost less
A payday loan can feel like the only fast option. It usually isn't. Here are safer ways to cover a short month, starting with the ones that cost nothing.
Facts checked October 14, 2026.
Why payday loans hurt. The Consumer Financial Protection Bureau's example: a $15 fee for every $100 you borrow for two weeks works out to an APR of almost 400%.
Borrow $400 and you owe $460 two weeks later. If you can't pay it all and roll it over, you pay another $60 just to push the due date back, and you still owe the $400.
Try these first, in this order
Ask for more time
Costs nothingLandlords, utilities, phone companies and lenders often agree to a payment plan, a later due date or a waived late fee, and it works best if you ask before you miss a payment. It costs nothing to call.
Get free help with the bill itself
FreeIf the gap is rent, a utility bill or groceries, there may be a program that pays part of it. Dial 211 or text your ZIP code to 898-211 to reach local help, any time.
See what you may qualify for → · Utility help · Rent help · Free food
Ask your employer for an advance
Often freeMany employers will advance part of your next paycheck, often for free. Ask HR or your manager, and get the repayment plan in writing.
Get a payday alternative loan from a credit union
28% APR capFederal credit unions can offer small "payday alternative loans," or PALs, under rules from the National Credit Union Administration. The rate is capped at 28% APR, a fraction of a payday loan's.
| PAL I | PAL II | |
|---|---|---|
| Amount | $200 to $1,000 | Up to $2,000 |
| Time to repay | 1 to 6 months | 1 to 12 months |
| Highest APR | 28% | 28% |
| Application fee | Up to $20 | Up to $20 |
| Membership wait | Member for at least 1 month | Can borrow as soon as you join |
Not every credit union offers PALs, so call and ask for a "payday alternative loan" by name. Find credit unions near you with the NCUA credit union locator.
Source: NCUA payday alternative loan rules (12 CFR 701.21), as amended in 2019.
Earn or free up cash this week
No debtDonating plasma, selling something you don't use, or picking up delivery shifts can cover a few hundred dollars without any debt.
If you use a cash advance app, use it once
Can top 100% APREarned wage and cash advance apps usually cost less than a payday loan, but they aren't free. A 2024 CFPB report found that when fees are counted, the average yearly rate on earned wage advances was over 100%, and the typical user took about 27 advances a year, nearly one every payday.
Skip the instant-transfer fee and the optional "tip" if you can wait a day or two, and don't let it become a habit.
Get free help with the bigger picture
Free or a small feeIf short months keep happening, a nonprofit credit counselor can help you build a budget and talk to creditors, often for free or a small fee. Look for one through the National Foundation for Credit Counseling.
Avoid these, if you can
Car title loans
The CFPB found that one in five people who took out a single-payment car title loan had their car taken because they couldn't repay. Losing your car can mean losing your way to work.
"Guaranteed approval" loans with an upfront fee
The FTC warns that a lender who promises a loan no matter your credit, then asks for a fee before you get any money, is a common scam. How to spot advance-fee loan scams.
Rolling over any loan
Each rollover adds a new fee without paying down what you borrowed. If you can't repay on time, ask the lender about an extended payment plan instead. Some states require payday lenders to offer one.
Common questions
What can I do instead of a payday loan?
Start by asking whoever you owe for more time or a payment plan, and call 211 for local help with rent, food and bills. If you still need to borrow, a payday alternative loan (PAL) from a federal credit union is capped at 28% APR. An advance from your employer or quick cash from selling things or donating plasma can also cover a short gap.
How much does a payday loan really cost?
The Consumer Financial Protection Bureau's example is a $15 fee for every $100 borrowed for two weeks. That works out to an APR of almost 400%. If you can't repay on time and roll the loan over, you pay the fee again.
What is a payday alternative loan (PAL)?
It's a small loan that federal credit unions can offer under rules set by the National Credit Union Administration. PALs range up to $1,000 or $2,000 depending on the type, last 1 to 12 months, can't charge more than 28% APR, and the application fee is capped at $20.
Are cash advance and earned wage apps better than payday loans?
They can cost less, but they aren't free. A 2024 CFPB report found that when fees are counted, the average yearly rate on earned wage advances was over 100%, and the typical user took about 27 advances a year. Skip the instant-transfer fee and "tips" if you can, and avoid using one every payday.
Is a car title loan a good idea?
Usually not. The CFPB found that one in five people who took out a single-payment car title loan had their car taken because they couldn't repay. Losing your car can mean losing your way to work.
How do I spot a loan scam?
A lender that guarantees approval no matter your credit and then asks for a fee before you get the money is a common scam, according to the FTC. Real lenders take fees out of the loan or bill them later, and they never ask you to pay with gift cards or a money transfer app.
Need help right now? Dial 211 or text your ZIP code to 898-211 for local food, rent and utility help, 24/7 in most areas. In crisis, call or text 988.