5 Best Alternatives To Payday Loans Heading into 2024

2. Credit Union Payday Alternative Loans (PALs)

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A Payday Alternative Loan (PAL) is a financial product offered by some credit unions to provide their members with an alternative to traditional payday loans. PALs are available to members of credit unions that are part of the National Credit Union Administration (NCUA), and borrowers must be members of the respective credit union to access these loans. PALs typically charge an application fee of up to $20 and allow individuals facing financial difficulties to borrow amounts ranging from $200 to $1,000. The interest rates on PALs are usually comparable to those of credit cards. While the interest rates may not be low, the short repayment timeframe helps mitigate the overall cost. Borrowers can set up PALs to be repaid within 1 to 3 months, and they may take out up to three PALs in a six-month period, provided there is no overlap or rollover of PALs.