Updated March 11, 2026
Compare personal loan costs
See what a small personal loan would actually cost you at current rates.
A typical payday loan charges $15 to $20 per $100 borrowed for a two-week term. Annualized, that is 390 to 520 percent APR. The CFPB has documented that most payday borrowers roll their loans over multiple times, paying more in fees than they originally borrowed. Every alternative on this list is cheaper. The best ones cost 90 percent less.
Why payday loans are so expensive
The structure is what does it. You borrow $400, write a postdated check for $460, and two weeks later the lender cashes it. The $60 fee sounds manageable until you realize that lending $400 for 14 days and collecting $60 for the service is the functional equivalent of a 391 percent annual interest rate. The CFPB's payday loan resource page puts it plainly: the average payday borrower pays $520 in fees to repeatedly borrow $375.
Twelve million Americans use payday loans each year according to Pew Research. The industry exists because it fills a real gap, not because borrowers enjoy paying 400 percent APR. The gap is real. The price is not acceptable when alternatives exist.
Credit union Payday Alternative Loans (PALs)
This is the most direct substitute for a payday loan. Federal credit unions offer Payday Alternative Loans under rules set by the National Credit Union Administration. PAL I loans cover $200 to $1,000 with terms from 1 to 6 months. PAL II loans go up to $2,000 with terms up to 12 months. The maximum APR the NCUA permits is 28 percent. That is not cheap by conventional standards, but it is 14 times cheaper than the average payday loan rate.
There is an application fee cap of $20. You need to be a credit union member to qualify, and some unions require a short membership period before you can apply. The bureaucratic friction is real. So is the $300 you might save on a $500 borrowing compared to the payday alternative down the street.
Cash advance apps
Apps like EarnIn, Dave, Brigit, and MoneyLion have built a business on advancing a portion of wages you have already earned but have not yet been paid. The mechanics vary. EarnIn tracks hours worked and advances up to $100 a day with no mandatory fee. Dave charges a $1 monthly membership and advances up to $500. Brigit charges $9.99 a month and advances up to $250.
The honest accounting requires annualizing those fees. A $3 tip on a $100 advance repaid in seven days is a 156 percent APR if you do the math. But the absolute cost is $3, not $20. That is a meaningful difference when your choice is between $3 and the car battery you need to get to work. Read the terms carefully, particularly around automatic repayment timing, and do not tip more than you need to.
Personal loans from online lenders
Online lenders have made it possible to get a $500 to $5,000 personal loan in one to two business days without visiting a bank branch. Lenders like Upstart, LendingPoint, and OppFi specifically serve borrowers with thin or imperfect credit histories. Rates for subprime personal loans typically run 20 to 36 percent APR. That is genuinely high for conventional lending. Against a payday loan rate of 400 percent, it looks reasonable.
The other advantage is that a personal loan reports to the credit bureaus. Every on-time payment moves your score up a bit. A payday loan does not help your credit at all, but a missed payment can still hurt it if the debt goes to collections. Use the personal loan calculator to see what a real monthly payment looks like at a 25 or 30 percent APR on the amount you need.
Credit card cash advances and 0% intro cards
If you already have a credit card, a cash advance is expensive but still cheaper than most payday loans. Cash advance APRs typically run 25 to 30 percent, and interest starts immediately with no grace period. On $400 for 30 days, the cost is about $10. A payday loan for the same amount costs $60 to $80.
If you have decent credit, applying for a card with a 0% introductory APR offer is even better. Several issuers offer 12 to 21 months interest-free on purchases and sometimes balance transfers. Getting approved and having the card in hand takes a week or two, so this option works better for anticipated shortfalls than emergency same-day needs. But for someone in a recurring cash-flow crunch, it is worth doing before the next crisis, not during it.
Employer payroll advances
Some employers offer payroll advances, either directly through HR or through third-party platforms like Even or Gusto. These are advances on wages already earned, not loans, so there is no interest in the traditional sense. Some charge a small flat fee per advance, others integrate it into existing payroll software at no cost to the employee. Ask your HR department if this option exists before looking anywhere else. It is the cheapest option on this list by a wide margin.
Negotiating with creditors and utilities
If the crisis is a bill you cannot pay, the first call should be to the company you owe, not to a lender. Utility companies in most states are required by regulation to offer payment arrangements before disconnecting service. Hospitals have financial assistance programs and will often settle a bill for far less than the stated amount, particularly for patients without insurance. A landlord who has had you as a reliable tenant for two years would often rather negotiate a late payment than start eviction proceedings.
None of this is guaranteed, but the downside is a 20-minute phone call. The upside is avoiding a three-digit APR.
Nonprofit and community lenders
Community Development Financial Institutions, called CDFIs, are federally certified lenders specifically designed to serve borrowers who cannot access conventional credit. They offer small personal loans, often with rates well below 36 percent APR, and sometimes with financial coaching included. The CDFI Fund, part of the U.S. Treasury, maintains a locator at cdfifund.gov. Local nonprofits and United Way chapters also frequently maintain emergency loan funds for residents in genuine short-term need.
If you are already in a payday loan cycle
Rolling over a payday loan is how a $400 problem becomes an $800 problem in a month. If you are already in that pattern, the fastest exit is a PAL from a credit union to pay off the payday balance, then repay the PAL over six months at 28 percent instead of rolling over at 400 percent. The math is not subtle. Thirty days on a $500 PAL at 28 percent costs about $12 in interest. Thirty days of rolling a $500 payday loan costs $75 or more.
The CFPB's payday loan tools include state-by-state information on extended repayment plans that lenders may be legally required to offer. Many states mandate that borrowers be given the option of a repayment plan at no extra cost after a certain number of rollovers. You may already have rights you are not using.
The debt payoff strategy guide and the credit score guide are worth reading once you have cleared the immediate crisis. Building enough credit history to access conventional lending rates is the long-term answer to never needing a payday loan again. The personal loan calculator can help you plan a consolidation once a cheaper option becomes available to you.
APR examples for payday loans are drawn from CFPB data and are representative averages. Individual loan costs vary by lender and state. Not financial advice.
See what a personal loan would actually cost
Compare rates and monthly payments for small personal loans.