The Best Payday Loan Alternatives of 2019

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The Best Online Payday Loans

If you’re short on funds due to an unforeseen expense, payday loans are one way — though not usually the best way — to access quick cash before your next paycheck. Payday loans are short-term lending solutions, so their approval process is faster than a long-term loan. However, their interest rates can be much higher than a credit card or a standard personal loan. That’s why payday loans should only be used as a last resort during a financial crisis. For other options, see our payday loan alternative section below. 

In fact, many states have legislated payday loan companies to protect consumers against predatory interest rates. According to the National Conference of State Legislatures, 37 states currently allow for payday lending (with limits), while 12 states have banned payday loans completely. But use extra caution in these six states, which don’t place any limits on fees or interest rates: Delaware, Idaho, Nevada, South Dakota, Utah, and Wisconsin.

The Best Payday Loan Companies of 2019:

#1: CashNet USA

CashNet USA offers online payday loans in 29 states as quickly as the next business day. It recently diversified to offer a variety of new loan types, including brokered installment loans (up to $3,000), installment loans, lines of credit. It also offers a savings program and free financial tools to help borrowers rebuild their credit score and make responsible borrowing decisions.

To apply for a payday loan through CashNet USA, you’ll need a government photo ID, Social Security number, proof of income and active checking account information.

Upsides

  •       Several loan options
  •       Easy to apply
  •       Instant decision
  •       Online resources

Downsides

  •       Online only (no brick and mortar)
  •       No same-day funding (next business day only)

#2: Speedy Cash

Available in 27 states, Speedy Cash payday loans up to $1,500, according to state limits. It also offers check cashing, money orders and title loans. Applying for a payday loan online or in-store requires an active checking account, government photo ID and a phone number. Depending on the state, proof of income may also be required.

Upsides

  •       Online and in-store 
  •       Check cashing and money orders
  •       Immediate cash at select stores via pre-paid card
  •       Some states don’t require proof of income

Downsides

  •       Online approvals may require two business days
  •       Most stores are on the West Coast

#3: Advance America

Advance America lends to customers in 28 states through more than 1,900 retail locations and online. Funding takes up to two business days but if you apply online before 10:30 a.m. Eastern, it’s possible to receive money the same day. To apply for an Advance American payday loan, you’ll need to provide a valid government photo ID, Social Security number, an active checking account and proof of income.

Upsides

  •       More storefronts than anyone else
  •       Online and in-person loans have the same rates and requirements
  •       Apply online and pick up at a store for faster funding
  •       No credit checks

Downsides

  •       No check cashing at storefronts
  •       Funding can be slow (up to two business days)
  •       Customer service available during business hours only

#4: RISE

RISE is one of the best online payday loan companies for borrowers with a low credit score. RISE uses its own rating system to analyze credit scores, income and bank account information to approve a customer’s payday loan. RISE also encourages borrowers to use its online personal finance resources to learn more about improving their financial future, and sends reports to credit bureaus to help borrowers build credit over time.

Upsides

  •       Allows for low credit scores
  •       No early-payment penalties
  •       Rate reduction after on-time payments
  •       Customizable loan terms

Downsides

  •       Online only
  •       May be more expensive than other payday loans
  •       Hard credit pulls (which will show up on your credit report)

#5: Check n’ Go

Check n’ Go has been around since 1994 and operates in 28 states. You can apply for payday loans through its website or in more than 950 retail stores. In addition to payday loans, Check n’ Go offers other money services like check cashing and money orders. To apply for a payday loan, you’ll need to provide a valid government photo ID, Social Security number, phone number, active checking account and proof of income. 

Upsides

  •       Money available in a few hours if you apply in person
  •       Unlike most payday lenders, can fund Friday loans same-day

Downsides

  •       Online applications not as easy as other companies
  •       You may have to fax your documents
  •       Very little information about payday loans available online

The Rest of the Best Online Payday Loans

A few additional payday loan companies didn’t make our top five but are still worth considering. Check Into Cash is one of the oldest payday loan companies and has been in business for 25 years. It offers payday loans up to $1,000, and the application process is easy, with next-day funding. Meanwhile, Chicago-based Opploans offers online payday loans for people with poor credit. Its terms are more flexible than other payday lenders and they don’t check your credit.

What Is a Payday Loan?

Payday loans are short term loans with quick approval and funding to cover you until your next paycheck. Most states limit the amount you can borrow to somewhere between $500 and $1,000. They’re typically used for medical emergencies, rent, credit card bills, food, or utility bills.

Your upcoming paycheck is used as collateral to cover the loan, making it a tempting choice for people with poor credit. As long as you can prove you have a job, provide an address, phone number and an active checking account, you’ll likely be approved for a payday loan.

Payday loans are different from personal loans, credit card loans and mortgages because they’re meant to be paid back within two weeks instead of over months or years. They usually don’t require a credit check or financial history like other loans.

However, payday loans should only be used if you have no other borrowing options available. The NCSL limits payday loan interest rates in 37 states to 15 to 17.5 percent, or a maximum of $17.50 per $100 in interest, but there are other fees a lender can charge.

If you take out an occasional payday loan and pay it back within two weeks, $45 may not be a bad amount to pay to borrow $300 of instant cash. The problem comes when you take longer to pay it back, or need to borrow regularly. According to CNBC, the average annual percentage rate is almost 400% because borrowers often can’t pay loans back as quickly as they thought. Compare that to a credit card with an APR of 21%, and you’ll see why payday loans should always be a last resort. There are plenty of alternatives worth considering first.

Best Payday Loan Alternatives

Alternative #1. Use a Credit Card Instead

If you need money fast, and you’ve got average to excellent credit and a paycheck on the way, using a credit card to cover emergency costs is one possible alternative to payday loans.

True, if you’re reading this, you may not qualify for or have a credit card, or if you do, perhaps it’s already maxed out.

But if you are able to go that route instead, it’s worth considering, especially if you can find one with a 0% APR.

While it typically takes a week to get a credit card in the mail, some companies — such as Discover — will ship you a card overnight (so long as you’re willing to pay the extra fees). Once you’re approved, you’ll have immediate access to your card.

If you want to apply for a new credit card, many offer an extended 0% APR period, well-suited for bigger purchases.

If you have existing credit card debt, however, consider using a balance transfer credit card, which offers a long window for cardholders to transfer and pay off outstanding debts.

Alternative #2. Apply for a Personal Loan

If your credit score makes qualifying for a new credit card difficult, then a personal loan from either a bank, credit union, or peer-to-peer (P2P) lender can help cover emergency costs.

Check Your Personal Loan Rates

Answer a few questions to see which personal loans you pre-qualify for. The process is quick and easy, and it will not impact your credit score.

Personal loans differ from payday loans in two key ways:

  • Loans are paid back in installments
  • Loans are paid back over time

So, instead of paying back the entirety of the loan by your next paycheck, you’ll have the opportunity to make smaller payments over more time with a personal loan or payday alternative loan — which will help improve your credit score as you pay down your debt.

We recommend going to your local bank or credit union for a personal loan first, but only if you have good to average credit. A personal loan is only a good idea if you can get a decent APR. It becomes harder to get a loan from a traditional bank or credit union when you have average or bad credit. You may not qualify, or your APR may be too high to justify the loan.

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Alternative #3. Payday Alternative Loan

A payday alternative loan (PAL) is the ideal payday loan alternative for anyone with existing debt and average to poor credit. If your credit history isn’t the greatest, but you still need emergency funding and don’t want to take a payday loan with bad credit, consider a PAL.

A payday alternative loan is a loan backed by the United States federal government, and is available through chartered National Credit Union Association (NCUA) members.

These loans are designed to help borrowers that are either caught or about to be caught in the debt trap of payday loans. Each loan offers the following features:

  • Loan amounts between $200 and $1,000
  • Payback terms ranging from one to six months
  • Processing fees up to $20
  • Lower interest rates of up to 28%

In order to qualify for a PAL, borrowers must be members of the federal credit union for at least one month. Which, true, does not help you if you aren’t yet a member and you need the money now. But it’s worth thinking about for the next time you need money.

Also good to know: In addition, the PAL must be repaid by the payment date, and cannot be rolled over. Lastly, borrowers may not take out more than three PALs within a six-month period.

Poor credit scores don’t affect a credit union’s willingness to grant a PAL. Instead, they’re more interested in consistent income and ability to repay.

The APRs on payday alternative loans vary by credit union. You can find and contact your local credit union here.

Common Questions About Payday Loans and Alternatives

Are payday loans legal in my state?

Financial organizations aren’t the only ones sounding the alarm about payday lenders. Federal and state governments are trying to curb payday loans too.

As of this writing, there are twelve states where payday loans are banned: Arkansas, Arizona, Connecticut, Georgia, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, North Carolina, Vermont, and West Virginia.

What are online payday lenders?

Online payday lenders allow borrowers to apply and receive payday loans over the internet instead of in a retail store. Online payday lenders are loan aggregators, third-party organizations that connect potential borrowers with a number of lenders. In addition to potentially predatory lending practices, online payday lenders may sell your personal information (which can include name, address, social security, and more) to other organizations without your knowledge or permission.

Lenders may also require direct access to a borrower’s bank account before providing a quote. That means if you choose to prioritize an essential cost like rent or groceries over a payday loan, the lender still has the power to take money out of your account. The Federal Trade Commission has sued multiple online payday lenders in the past for misrepresenting the cost of their loans.

Are installment payday loans safer?

During your search, you may have seen advertisements for installment payday loans, as opposed to lump-sum payday loans. Installment payday lenders promise smaller monthly payments and a more flexible repayment schedule. Though installment payday loans are more flexible, they’re still just as risky as lump-sum payday loans. And like payday lenders, installment lenders often target those with less-than-perfect credit.

Lump-sum payday loans are often $100 or less, but installment payday loans sometimes cost over $1,000. It’s true that installment payday loans have lower APRs on average. While some installment loan APRs can go as low as 25%, many are still in the triple digits. The interest appears lower at first glance, but installment payday loans also include monthly compounding in monthly fees. The extra fees won’t be explicit when you first take out your loan, but they’ll be on your bill once you start making payments.

Like lump-sum payday loans, installment loans can be extended — for a fee, of course. The only difference is if you can’t pay, the fees are renewed every few months, as opposed to every few weeks.

While lump-sum payday loans are unsecured, installment payday loans usually require collateral. You may have to put up your vehicle or other expensive items as security for your loan.

If you see a short-term, high-dollar installment loan while shopping around, avoid it. Payday lenders are beginning to offer installment loans in response to political pressures currently placed on lump-sum payday loans.

Should I consider bankruptcy as an alternative to payday loans?

Bankruptcy may seem like a worse option, but sometimes it really isn’t – not if you’re constantly taking out payday loans and you’ve been buried in debt for some time. Bankruptcy has a bad reputation, but if you’re in a cycle of debt that you can’t get out of, it may be the most financially healthy decision you can make. There’s no definitive time to know when it’s right to declare bankruptcy. The only sure sign is if you know that your current situation is going to harm your financial future or that of your children.

Payday Loan Alternatives to Avoid

Chances are you found this page because you’re in need of emergency funding, but would still like to avoid the high APRs of a payday loan. This is a difficult time, and unfortunately, there’s a variety of predatory loans targeting desperate people.

In your research, you may have come across other emergency loans that can be just as potentially hazardous as payday lending, and should be avoided. Steer clear of cash advances and auto title loans.

Both may offer lower APRs and more flexible repayment terms than payday lenders, but both come with long term-consequences and high fees.

Avoid Using a Cash Advance as a Payday Loan Alternative

We define cash advances as loans offered through your credit card. Many credit cards allow cardholders to borrow cash up to a certain limit. Each cash advance comes with hefty fees, interest rates that could exceed 20%, and no grace period, which means you’ll begin paying off your loan the very next month.

If you have to take out a cash advance:

  • Understand your credit card’s terms and conditions
  • Use a card with $0 balance
  • Do not make any purchases on the card until your loan is repaid

Avoid Using an Auto Title Loan as a Payday Loan Alternative

Don’t do it. If you have to choose between an auto title loan or a payday loan, take the payday loan. Still, neither choice is a good option. Auto title loans, also known as car title loans, are secured loans made using your vehicle as collateral. So if you default on your loan, your vehicle may be repossessed.

According to the FTC, auto title loans typically:

  • Have a triple-digit APR.
  • Have a 15- to 30-day repayment period.
  • Can be 25% to 50% of the car’s value.

Repayment of an auto title loan might not even have a positive effect on your credit score, and should be avoided at all costs.

How to Get a Payday Loan

We just spent a lot of time telling you not to get a payday loan or payday advance, and now we’re going to explain how to do it. While we don’t recommend payday loans, we understand they may be your only choice, and as we noted, they’re still better than an auto title loan. So if you’ve exhausted every other alternative, and you have a short-term, necessary debt you absolutely must pay, then a payday loan may be your only option. 

Find out what documentation you’ll need: First, once you settle on a lender, you’d do well to call ahead and ask what documentation you’ll need. If the customer service isn’t friendly, that may be a red flag — but mostly, we’re trying to save you time. You don’t want to wait in a long line and get to the counter and learn that you should have brought your electric bill and your driver’s license. Every lender is different, so it’s impossible to say what documentation you’ll need.

Never borrow more money than you need: You’ll be asked how much money you want to borrow, and you might be tempted to ask for a bigger payday loan than you need. But the more money you borrow from a payday lender, the greater your exposure to astronomically high interest and fees, so you should only borrow exactly what you need to cover urgent expenses. Have this conversation with yourself before you go: Borrow too little, and you may feel like you need to borrow more money in a few days. But fall into the temptation of borrowing too much, and you’ll just be in more debt.

Negotiate the longest possible payment period: Payday loans have such a high APR because they’re designed to be repaid in such a short period of time — anywhere from a week to a month. Unless you’re positive you’ll be able to repay the entire loan in a week’s time, try to negotiate for the longest payment period possible. Otherwise, you may be charged a “renewal” or “rollover fee” to extend your due date.

The Bottom Line of Payday Loan Alternatives

Choosing to borrow using payday loan companies should be a last resort. If you absolutely have to use one, make paying the loan back a top priority to save yourself from high fees. Prioritize saving to cover emergency expenses. Putting away as little as $10 per week can be a lifesaver. It’ll add up to $500 in emergency funds over the course of a year. If you pay your emergency fund back just as you would with your payday loan, you may never need to borrow from a short-term lender again.

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