When you need a fast loan to get you to your next paycheck, a payday loan might seem like an easy solution. However, California laws allow payday lenders to charge up to 15% of the loan amount, which is equivalent to a 460% APR for a two-week loan. Plus, California laws only allow a maximum payday loan of up to $300, including fees. So, if you need to borrow $250 or more, consider these less expensive loan alternatives.
Consider these lenders that provide fast, more affordable alternatives to payday loans. Options include payday alternative loans (PALs), cash advance apps, installment loans and personal loans.
| Lender/Provider | Loan type | Loan amounts | Cost | Turnaround time | Eligibility requirements | |
|---|---|---|---|---|---|---|
| CBC Federal Credit Union | PAL | $200 to $2,000 | $20 application fee, rates start at 10.99% | Within minutes if approved | Must be a CBC member for at least 90 days, at least 3 months at current employer, valid SSN | |
| Dave | Cash advance app | Up to $500 | Monthly membership fee (undisclosed, up to $25 instant transfer fees | Within 1 to 3 days or instant for a fee | At least 18, US citizen, bank account that’s 60 days old, positive bank balance, at least 3 recurring deposits, at least $1,000 in total monthly deposits | |
| Possible | Installment loan | Up to $250 | $15 to $20 per $100 borrowed | As soon as the same day | US citizen, checking account compatible with Plaid, 3 months transaction history, recent income deposits, positive bank balance | |
| Albert | Cash advance app | $25 to $250 | $14.99 monthly membership | Instant | Active, linked bank account, qualified direct deposits to Albert Cash account, Genius membership | |
| Veridian Credit Union | PAL | Up to $1,000 | $25 application fee, 19% to 21% APR | Not stated | Be a Veridian member in good standing, have paycheck directly deposited, proof of income, no PALs within last six months | |
| Grace Loan Advance | Personal loan | $100 to $35,000 | 5.99% to 35.99% | As soon as 1 business day | Be 18 and a US resident, have a job or other regular income, active bank account | |
| Chime MyPay | Cash advance app | Up to $500 | $2 instant transfer fees, no subscription fees | Within 2 business days or instant for a fee | Have a Chime checking account and debit card, at least $200 in qualified direct deposits | |
| SchoolsFirst Federal Credit Union | Payroll savings loan | Up to $500 | 17.90% | Not stated | Have a SchoolsFirst FCU account in good standing, have direct deposit or payroll deduction | |
| Brigit | Cash advance app | $50 to $250 | $8.99 to $14.99 monthly membership fee, undisclosed instant transfer fees | 1 to 3 business days or instant with premium membership or for a fee | Have an active bank account that’s at least 60 days old, have a positive bank balance, have at least three recurring deposits from the same source | |
| Smart Advances | Personal loan | $100 to $20,000 | 5.99% to 35.99% | As soon as the next business day | 18 years old, US citizen, SSN, valid bank account, job or other regular income |
Each alternative to $255 same-day payday loans has key features — such as good for people with bad credit or low rates — that set it apart from other options. Consider which loan product makes the most sense for you and your financial situation.
A cash advance app might be a good choice if you have bad (or no) credit but a steady source of income. Cash advance providers generally don’t do credit checks or charge interest or late fees, but they require a history of recurring deposits to qualify. You may also need to get paid by direct deposit, although a few providers don’t require direct deposit.
However, cash advance apps have short loan terms — usually just until your next payday or deposit — and it may take time to become eligible for advances up to $250. You may also be required to pay a monthly subscription fee and an additional fee if you need the cash right away — though some cash advance apps are mostly free.
If you have a decent credit score and prefer a longer loan term, a personal loan might be the way to go. Personal loan lenders typically require a hard credit check, which may drop your score a few points temporarily, and requirements to qualify may be stricter than other options on this list. Also, if you only need to borrow a small amount, it may be difficult to find a personal loan for $250 or less.
But personal loan rates are capped at 35.99%, much lower than payday loans, and you could potentially borrow a larger amount if you need it. Plus, loan terms are much longer, giving you some breathing room to pay it back. And, if you have a good credit score, you could qualify for a competitive rate.
Members of some federal credit unions may have the option to take out a PAL, but you’ll usually need to be a member for at least 30 days to qualify. PALs range from $200 to $1,000 — although some go as high as $2,000 — and rates are capped at 28%. Loan terms are anywhere from one to six months or up to 12 months for $2,000 loans.
TIP: Even if your bank or credit union doesn’t officially have a PAL, it may still offer a version of it. Many banks and credit unions provide small-dollar loans or lines of credit at reasonable rates for customers in good standing.
Installment loans generally refer to short-term loans similar to payday loans but typically have better rates and longer loan terms. You might also get a larger loan amount than payday loans. However, rates can still reach into the triple digits with some installment loans, so you may want to exhaust other options first.
California laws stipulate that the maximum payday loan allowed is $300, including fees. And the most a lender can charge is a 15% fee — up to $45 — meaning the total loan amount borrowers can receive is $255. Plus, payday lenders cannot issue a new loan if you already have one, nor can the lender charge additional fees if you request an extension of time or payment plan.
In addition, all payday lenders in California must be licensed by the Department of Financial Protection and Innovation (DFPI), and they must post their license and fee schedule at every location. To verify if a lender is licensed in California, go to dfpi.ca.gov. That’s also who to contact if you need help or think the laws are being violated.
Payday loans may be fast and convenient, but they’re incredibly expensive and put borrowers at risk of falling into a cycle of debt. Luckily, there are many alternatives to payday loans, such as personal loans, cash advance apps, PALs and installment loans. Take the time to explore your loan options before giving your hard-earned cash to a payday lender.
Cash advance apps are arguably the fastest way to borrow money. In most cases, for a fee, you can have cash in your bank account in just a few minutes. But you have to be approved for advances, and loan amounts are usually fairly small, especially if you’re new to the app.
While it’s illegal to get two payday loans from one lender in California, you could theoretically get two loans from two different payday lenders. However, with rates so high for these types of loans — and terms so short — you’re putting yourself at a greater risk of falling into a cycle of debt that can be hard to break out of.
There are a number of better alternatives to payday loans, but the “best” option depends on your unique situation. For example, if you want to avoid a credit check, a cash advance app might be the way to go. If you have excellent credit, however, a personal loan might be a better move.
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Have up to $250 automatically deposited into your account — for a $9.99 membership fee.