Lower-cost alternatives at a glance

Before you take a payday loan, it is worth spending 10 minutes on the alternatives. Most of these are dramatically cheaper. None of them are perfect. Pick the one that fits your situation and the time you actually have.

Credit union PAL loans

A Payday Alternative Loan (PAL) is a small-dollar loan offered by federal credit unions. The National Credit Union Administration caps the APR at 28% and the application fee at $20. Loan amounts run from $200 to $2,000, with terms of 1 to 12 months. You usually need to be a member of the credit union for at least 30 days, though some credit unions waive that for borrowers in a bind.

If a PAL is available to you, it is almost always the cheaper option. Find a federal credit union near you through the NCUA's locator.

Earned-wage access apps

Apps like EarnIn, DailyPay, and Payactiv let you draw a portion of wages you have already worked but not yet been paid. Many charge no mandatory fee and ask only for an optional tip, though some charge a small flat fee for instant transfers. Cheaper than a payday loan in most cases, but the amount you can draw is limited to what you have already earned.

Ask your employer for an advance

Quietly underused. Many employers, especially small ones, will advance a paycheck or a portion of one without paperwork. Some have a formal hardship program. It costs nothing, does not touch your credit, and avoids the lender entirely. The conversation is awkward. The math is excellent.

Negotiate the bill instead of borrowing

If the reason you are looking at a payday loan is a single bill (a medical bill, a utility past-due notice, a car repair), call the biller before you borrow. Hospitals, utilities, and many auto repair shops have payment plans, hardship discounts, or charity-care programs they do not advertise. A 0% payment plan from the hospital beats a 391% APR loan every time.

A small loan from a community bank or local lender

Some community banks offer small-dollar loans to existing customers with a checking account in good standing. APRs are usually under 36%, and the loan reports to the credit bureaus, which helps your score over time. Not every community bank does this, but it is worth a call to the branch where you already have an account.

Nonprofit and faith-based hardship assistance

Local nonprofits, religious organizations, and community action agencies offer one-time grants or zero-interest loans for rent, utilities, transportation, and other emergencies. The 211 helpline (call or text 211) connects you with assistance in your area. The application process is slower than a payday loan. The cost is zero.

A credit card cash advance

Not great, but better than a payday loan in most cases. Cash advance APRs are usually 25% to 30%, with a fee of 3% to 5% of the amount. On a $300 advance, the fee is around $12 and the interest accrues from day one. Still a fraction of what a payday loan will cost over the same period.

See how payday loans work for comparison.