Can Alternative Payday Loans Save Those with Really Bad Credit Score?

Last Update: September 6, 2021 Loans

Do you know that payday loans are NOT the last option for getting a loan, even if you are with really bad credit? No, don’t go with payday loans! Payday loans are costly, lead people to a debt cycle, and are predatory. There are many other options. Let us show you…

First of all, it’s a big myth that personal loan companies don’t approve people with bad credit. In fact, many personal loan companies approve people with bad credit.

Second, even if you can’t get approved on a personal loan, alternative payday loans are other options. These loans are more expensive than traditional payday loans, but times less expensive than traditional payday loans, AND approve people with really bad credit!

What are alternative payday loans, how do they work, when should you use them and when not, are they predatory, are they legit?

Quick facts about alternative payday loans:

  • They are times cheaper than traditional payday loans.
  • They approve people with really bad credit… very fast and easy.
  • They can help people who already have payday loans to refinance them in something significantly better.
  • At last, many people don’t know much about them and don’t use them as an alternative to predatory payday loans, which leads them to pay a lot of money or lead them to a debt cycle.

Let’s start with the last point…

Every day, we at ElitePersonalFinance receive so many questions from people with bad credit.

Our personal analysis shows that over 70% of the people who ended up with super expensive payday loans had better options. Some of these people could qualify for personal loans, others for alternative payday loans.

People still don’t understand that they have many options, even with bad credit, better than payday loans. That’s why we decided to put clarity on that topic.

You will save a lot of money …

What are Alternative Payday Loans?

First of all, don’t worry because you see the term “payday loans.” Actually, alternative payday loans are totally different types of loans from alternative payday loans.

To understand alternative payday loans correctly, you have to understand personal loans and what payday loans are before that.

What are Personal Loans?

Personal loans are a relatively large amount of loans but could be a lower amount. The amount varies between $500, and in some cases, it could be up to $100,000.

These loans can be set to be repaid on installments picked by the borrower. Terms could be from a few months to 10 years for large amounts.

Their APR varies between 5.99% to 35.99%. People with good credit receive loans that are close to the lower limit. However, those with bad credit receive more expensive loans close to the highest limit.

Myth! If I’m with bad credit, I can’t get a personal loan. That’s NOT true. These days people with bad credit can qualify for a personal loan.


35.99% is a standard that every legit personal loan company obeys. If a lender offers you a personal loan with APR higher than 35.99% (actually, many lenders do so), it would be questionable whether we can call it a personal loan!!!

Misinterpreting the loan terminology … you will see that many times in the lending business.

In fact, many lenders in the loan business try to misinterpret the terminology. It works …

Now, What are Payday Loans?

Payday loans are short-term loans, typically paid at one time, on the next payday when you get a salary, for example. These loans are very expensive. Their average APR, according to the Consumer Financial Protection Bureau, is 400%.

They typically offer up to $500 to $1,000.

Payday loans often lead to a debt cycle.

Payday loans are illegal in many states, and in some, they are legal but highly regulated. Link to payday loan laws by state below in the description.

Payday loans serve those with really bad credit who can’t qualify for other types of loans.

Payday loans are predatory.

We at ElitePersonalFinance highly recommend that people avoid them, and there are few really good reasons for that …

  • They are very expensive and often lead people to a debt cycle.
  • And, there are many better options for people with bad credit available.

Alternative Payday Loans

Now, let’s talk about these types of loans.

As you can see, the gap between personal loans and payday loans is huge.

And this gap is filled by relatively new types of loans that entered the stage a few years ago. We call them alternative payday loans.

Think about alternative payday loans as everything that is between personal loans and payday loans.

Before giving you more details on them, we have to say that each company has different rules. So, there is no exact definition of them.

But, here is what we can say about them overall.

First of all, and most important, is that they serve people with really bad credit.

They are more expensive than personal loans, but they are times cheaper than traditional payday loans. This makes them more attractive to many people with really bad credit.

The amount that they offer is typically from $100 to $5,000.

These loans can be repaid in installments, which decreases the chance of getting into a debt cycle.

Who Are These Companies?

OppLoans, LendUp, NetCredit, RiseCredit. Probably you’ve heard some of them. But there are more. In fact, the alternative payday loan business grow. There is big competition between these companies, which makes this type of market always improve, which works for us. There are always new companies with better terms that enter the stage. ElitePersonalFinance carefully monitors them, and we update you with the latest on our loan shopping center.

Check the link in the description to find always the best alternative loans.

Advantages of alternative payday loans.

Alternative payday loans try to differentiate them from predators, so they have many other features. They vary by company. Here are a few of the most important of them.

  • They are more flexible. Some of them allow you to skip a monthly payment, even without a call, only with an online button click.
  • They help you build your credit. People who work with them on building their credit and pay their monthly on time receive discounts and better offers.
  • They report your payment history to credit bureaus, which help you build credit.
  • Very fast approval.
  • Most of them don’t even check your credit score. However, they require proof of income.
  • They will allow you to make changes to the loan payment plan.
  • Less additional and hidden fees.

However, there are disadvantages to alternative payday loans.

  • Much more expensive than traditional personal loans.
  • They don’t offer loans higher than $5,000. Also, not all people can apply for this amount.
  • They operate in fewer states.

Now, many people ask us whether we recommend alternative payday loans.

Well, yes and no.

We don’t want to mislead people. Alternative payday loans are expensive, and that is why we can’t mainly recommend them.

It’s a fact that many big legit personal finance blogs like NerdWallet, Financer, WalletHub, Bankrate, USNews actually started to review these types of companies. However, most of them totally ban traditional payday loans.

But all of them give advice like use them only if there are no other options.

Our advice won’t be different.

But …

There is a catch!

Are you actually sure that there really are no other options? Many people think that they are sure, but they are not right.

We see people scammed by payday loans every day, thinking that they had no other options. In fact, that they have!!!

So next, let’s give you our guide on:

When Should People Get Them and When to Avoid Alternative Payday Loans?

The brief answer to this question is easy and obvious. Use them the way that their name says – alternative to payday loans. Actually … use them only if you have no other options.

However, the problem is that most people don’t know about these options. Many people think that they have tried all other things, but they are wrong.

People typically try a few things, then get denied, then most of them get manipulated that there are no other options than payday loans, and they end up with them.

We at ElitePersonalFinance every day speak with people with bad credit. In our personal view, over 70% of the people who have ended up with payday loans had other options. But they haven’t at least tried them …

Really, there are so many things that you can do, guys, before going with payday loans.

Tip number one that we always give to people with bad credit is to wait and work on their credit score until it improves. People with good credit have so many great offers for loans. Banks, credit unions, online lenders are available to them.

However, improving your credit score is not a fast process. And this doesn’t work for many people who can’t wait.

There are so many types of loans that work for people with bad credit guys. You will pay more interest rates with bad credit, but the numbers will be better than these 400% APR on payday loans.

Personal loans for bad credit are available. Shop around. Try all of them. Why not? You lost nothing. It’s free, and your credit score wouldn’t be affected. We have listed them on our loans shopping center. Link below.

Credit unions. Credit unions offer loans for people with bad credit capped at 18%. Many credit unions offer payday loan alternatives, typically up to $500 to $1,000, capped at 28%. Still times better than payday loans.

Secured loans and cosigner loans. If you have these options, things can change for you.



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