Almost anything costs less than a payday loan - find alternatives that cost much less
You need money before your next paycheck, and a payday loan looks like the fastest way to get it. The money is real and it comes quick — but a payday loan is one of the most expensive ways there is to borrow, and almost every other option on this page costs less.
This page walks through those cheaper options, starting with the ones that cost nothing and working up to the kinds of borrowing you'd only use if you had to.
- NOTE: In addition to potential scams (we have details on “red flags” to look for below) Not every payday loan alternative is actually safer. Be cautious with lenders, businesses or even people that ask for upfront fees or that promise help.
Why a payday loan costs so much
The problem with a payday loan isn't only the fee. It's also that the whole balance is due on your next payday, usually about two weeks out. If you can't cover it then — and most people can't — you pay another fee to push the due date back, then another. A loan you meant to clear in two weeks can drag on for months of fees and end up costing several times what you first borrowed. The Federal Trade Commission lays out how that adds up, along with the safer options to reach for instead at https://consumer.ftc.gov/articles/what-know-about-payday-and-car-title-loans.
First, check whether you need to borrow at all
Before you take any loan, it's worth a few minutes to see if you can avoid one.
Call whoever you owe and ask for more time. Utility companies, hospitals, and landlords deal with this constantly, and many will set up a payment plan or push back a due date if you ask before the bill is late.
Look into emergency help, too. Local programs, churches, and charities give money for rent, utilities, and other basics without expecting it back. See the NHPB local financial assistance programs by county and city page. And if you do need to borrow, some nonprofits and a few employers offer loans that don't charge any interest — the cheapest borrowing there is.
The cheapest place to borrow is usually a credit union
If you're going to take a loan, start with a credit union. They're member-owned and lend at lower rates than banks, and they'll work with people whose credit is thin or bruised. Many also make a small loan built for exactly this situation — a couple hundred dollars, paid back over a few months, at a rate a fraction of a payday lender's. Here's how a credit union's payday alternative loan works, and information on what else a credit union can lend you if you need more than a small amount.
Ask your own bank
If you have a checking account, ask your bank whether they offer a small-dollar loan or an advance on your direct deposit. A number of banks now do, and the money lands fast — often the same day — at a cost far below a payday lender's. Ask the bank you already use before you look anywhere else.
An advance on pay you've already earned
If the problem is just timing — payday is a few days away and the bill is due now — see whether you can get at money you've already earned. Some employers will advance part of your paycheck, and a number of apps and payroll services let you draw earned wages early, sometimes free and sometimes for a small fee. It's not new debt; it's your own pay, a little sooner. More on getting paid for hours you've already worked.
If you're paying for a purchase, not cash
When the need is a specific thing to buy rather than cash in hand, buy now, pay later can split the cost into smaller payments, and several of these services charge no interest if you pay on schedule. Just watch the missed-payment fees, and don't stack up more of these than you can keep track of. Here's why BNPL apps are popular and what the apps are.
More costly, but still better than payday
A couple of options cost more but still beat a payday loan.
A cash advance on a credit card charges interest from the day you take it, and the rate is higher than your card's normal purchases — but it's usually cheaper than a payday loan. Compare the numbers before you decide.
Borrowing from family or friends can work too, if you treat it seriously. Put the amount and a repayment plan in writing so there's no confusion later. Even a partial loan from someone you trust is money you don't have to borrow at a high rate.
If bad credit is what's pushing you toward payday
Some people end up at a payday lender because they think no one else will approve them with a low credit score. That's usually not true. Plenty of credit unions, nonprofits, and other lenders make loans to people with poor or no credit — there's a fuller guide to who lends to borrowers with bad or no credit.
Watch for loan scams, and a last resort
One warning as you compare lenders. A legitimate lender never asks you to pay a fee up front to "release" or "guarantee" a loan, and never wants payment in gift cards or a wire transfer. "Guaranteed approval" and "no credit check" are bait. If a lender asks for money before you get any, walk away and report it at https://reportfraud.ftc.gov/.
If you've worked through these options and still have to borrow at a higher cost, do it with your eyes open. Borrow only what the emergency actually requires, and know how you'll pay it back. There's more on where people turn for an emergency loan as a last resort.
This page is for general information and isn't financial or legal advice. Loan rates, fees, and terms change and vary by lender, so check the current details with any lender or credit union before you borrow.
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