Payday Loan Alternatives

Are there alternatives to payday loans?

To provide credit union members with an alternative to high-cost payday loans, the National Credit Union Administration (NCUA) allows under its regulation federal credit unions to offer small-dollar loans called payday alternative loans (PALs).​

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​PALs include specific consumer protection features:

  • Loan amounts between $200 to $1,000. 
  • The borrower must be a member of the federal credit union for at least 1 month. 
  • The term of the loan must range from 1 to 6 months.
  • The federal credit union can charge an application fee only in the amount needed to recoup the actual costs associated with processing the borrowers application, up to $20.
  •  The PAL cannot be rolled over.

Some credit unions additionally offer free financial counseling services to their members. Contact your local federal credit union for availability of payday alternative loa​ns and free financial counseling services.

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