Payday loan alternatives: what payday and title loans cost, and what else to try (2026)

How do payday loans work?

A small loan, usually $500 or less, due in one payment on your next payday. You hand over a post-dated check or bank access to repay it.

The CFPB says the due date is typically two to four weeks out. To repay, you generally write a post-dated check for the full balance plus fees, or authorize the lender to debit your account. If you don't pay by the due date, the lender can cash the check or take the money ^[1]. Payday lenders generally don't check whether you can repay while still covering your other bills ^[1].

Some state laws let a lender roll over or renew the loan, meaning you pay only the fee and the due date moves out ^[1]. That's how a two-week loan turns into months of fees.

How much does a payday loan cost?

Many states cap fees at $10 to $30 per $100. The FTC says $15 per $100 for two weeks equals a 391% APR; credit cards run about 12% to 30%.

The CFPB says many state laws set a maximum payday loan fee, from $10 to $30 for every $100 borrowed. A typical two-week loan at $15 per $100 equals an APR of almost 400% ^[1]. The FTC puts that same loan at 391% ^[2]. For comparison, the CFPB says credit card APRs range from about 12% to about 30% ^[1].

Active-duty service members and their dependents get extra protection. The federal Military Lending Act caps the Military Annual Percentage Rate at 36% on payday and other consumer loans ^[1].

How do car title loans work, and what do they cost?

You hand over your car title for a short loan, often 15 or 30 days. The FTC says fees of up to 25% a month work out to about 300% APR.

The FTC says title loans are usually for 25% to 50% of the car's value. If you can't repay, the lender may repossess the car, even if you've made partial payments ^[2].

The CFPB's 2016 study of single-payment title loans found the typical loan was about $700 at about 300% APR. More than four in five were renewed the day they came due, and one in five borrowers had the vehicle seized ^[3]. Losing the car can mean losing the way you get to work.

Are payday loans legal in every state?

No. Rules vary by state. Some states don't have payday lending at all, and many that allow it cap the fees, the loan size or both.

The CFPB says some states don't have payday lending because state law doesn't permit it, or because lenders won't operate at the fees those states allow ^[1]. Where it's allowed, many states cap the cost, the fees and the maximum loan amount ^[1]. Your state regulator or attorney general can tell you what applies where you live ^[1].

What is a payday alternative loan from a credit union?

A small loan federal credit unions can offer at up to 28% APR. PALs I run $200 to $1,000 for one to six months; PALs II go up to $2,000 for up to 12 months.

The NCUA's 28% figure is 10 points above the 18% ceiling it currently sets for most federal credit union loans, which it has extended through September 10, 2027 ^[6]. Not every credit union offers PALs. MyCreditUnion.gov says many state-chartered credit unions have similar products, and some credit unions offer free financial counseling to members ^[4].

What else can you do instead of a payday loan?

Ask for more time on the bill, ask your employer for an advance, call 211 for local help, or talk to a nonprofit credit counselor.

1. Call the company you owe Ask for more time or a payment plan. The FTC says creditors may be willing to work with you; ask whether there's a fee for the extension ^[2]. A hardship letter puts the request in writing.
2. Ask your employer for an advance MyCreditUnion.gov lists an employer advance as an alternative to a payday loan ^[4].
3. Call or visit 211 211 connects you with local help for bills, housing, utilities and food. Calls are confidential and can be anonymous ^[9]. MyCreditUnion.gov also suggests asking state or local government about emergency assistance ^[4].
4. Talk to a nonprofit credit counselor The CFPB says counseling organizations are usually nonprofits that offer free or low-cost advice, budgeting help and debt management plans. Ask about fees up front and get the price in writing ^[8].
5. If you serve in the military MyCreditUnion.gov points active-duty members to their service relief or military welfare society ^[4].

Is earned wage access a safer alternative to a payday loan?

It can cost less, but it isn't free. The CFPB says EWA that meets its tests isn't credit, so you won't get an APR to compare. Add up the fees and tips yourself.

Earned wage access (EWA) lets you get pay you've already earned before payday. The CFPB describes two types. Employer-partnered providers work with your employer and take the money back through payroll. Direct-to-consumer apps estimate your earnings and usually debit your bank account after you're paid ^[7].

In a December 2025 advisory opinion, the CFPB said EWA isn't credit under Regulation Z when it meets all of its tests ^[7]. The amount can't exceed wages you've earned, based on payroll data. It's repaid through a payroll deduction. And the provider has no claim against you if that deduction falls short: it won't collect the money, sell the debt or report to a credit bureau ^[7]. The CFPB also said fees for faster delivery and tips are not finance charges in the normal course ^[7].

The same notice withdrew the CFPB's 2024 proposal that would have treated all EWA as credit ^[7]. The opinion says it doesn't claim that EWA outside those tests is credit, and that the CFPB is still evaluating other products ^[7]. So an EWA app may not show you an APR at all. Total up the expedited-delivery fees, subscriptions and tips you'd pay, and check whether the app debits your bank account, because that's where an overdraft can come from.