Best Alternative Payday Loans Online for Bad Credit of January 2026
ElitePersonalFinance found the best alternative payday loans for bad credit of January 2026! We can help you get much cheaper loan when you have a credit score of 500 and below. Stay with us!
Before you go with alternative payday loans, we recommend that you check our list of the best unsecured personal loans for bad credit of January 2026. On this list, you can find great personal lenders that approve bad credit. Over 70% of the people have success there.
If you can’t get approved for a personal loan because of your bad credit, you SHOULDN’T go with payday loans. There are many other options for you. One of them is alternative payday loans. Alternative payday loans offer loans for very bad credit when traditional personal lenders can’t help you.
Alternative payday loans can be defined as everything that is between payday and personal loans. Their amount is roughly between $100 and $5,000. Their APR is roughly between 30% to 400%. All alternative lenders have different offers within this range.
Below is a complete list of all legitimate alternative payday loans that can help you when you have very low credit. We recommend that you apply with all of them before going with payday loans. All lenders below perform a soft credit check, so you shouldn’t worry about your credit score. Shop around before you pick the best lender!
$200 - $5,000 0 5.99% - 35.99% < 1 Day 1 - 72 Months $100 - $15,000 0 5.99% - 35.99% < 1 Day 1 - 72 Months $100 - $40,000 0 Vary < 1 Day 1 - 60 Months $500 - $10,000 0 5.99% - 35.99% < 1 Day 3 - 36 Months When we talk about bad credit loans, BadCreditLoans.com should always be at the top of our list! And there is a good reason for that. BadCreditLoans have helped millions get a personal loan, while so many people still pay insane interest on their payday loans. BadCreditLoans.com is a leading company helping people with really bad credit. They are NOT a payday loan company! They are a huge marketplace connecting people with bad credit with lenders offering UNSECURED bad credit loans. The company offers loans of $500 to $10,000, APR 5.99% to 35.99%. And bad credit is always approved ... in less than a day. In fact, this is the most successful personal loans company for bad credit that we at ElitePersonalFinance know. Whether you want to get a bad credit loan or refinance your existing payday loans with one cheaper loan, try BadCreditLoans. $500 - $10,000 0 5.99% - 35.99% < 1 Day 3 - 72 Months Designed specifically for those with bad credit, CashUSA offers installment secured personal loans for people with bad credit. APRs range from 5.99% to 35.99%, but even if you have bad credit, putting collateral to your loan can lower the APR as low as 10%. CashUSA offers loans up to $10,000, but according to their website, the amount can be increased under certain conditions. But remember, if you fall behind on your payments, there is a chance you could lose your car. We only recommend secured loans if you’re sure you can repay the debt on time and in full. $100 – $40,000 0 Vary < 1 Day 1 – 60 Months $100 - $40,000 0 Vary < 1 Day 1 – 60 Months $1,000 - $35,000 580 5.99% - 35.99% < 1 Day 3 - 72 Months PersonalLoans offers unsecured loans ranging from $1,000 to $35,000, and because the company only requires a minimum credit score of 580, PersonalLoans is a great place to obtain a bad credit loan. Its APRs range from 5.99% to 35.99%, but you need to have some form of recurring income to qualify. It can be full-time employment, self-employment, regular disability, or Social Security benefits. Loans are not available to residents in Arkansas, Georgia, or New York. If your credit score is really bad and you can’t qualify for a none of these, there are other options. These loans are more expensive, but the approval rate is high. $100 - $40,000 0 Vary < 1 Day 1 - 60 months $100 - $15,000 0 5.99% - 35.99% < 1 Day 1 - 60 Months $500 - $4,000 0 59% - 160% < 1 Day 9 - 18 Months We recommend alternative payday loans for those with really bad credit who can't qualify for a personal loan. These companies are more expensive than personal loans but much better than payday loans. The company offers loan amounts ranging from $500 to $4,000, with APRs that range from 59% to 160%. Loan duration range from 9 months to 18 months, but people can choose to give their money back in a month. OppLoans charges zero prepayment penalties. Their loans are unsecured, which means no upfront collateral is required, and as you continue to make on-time payments, you build your credit score in the process. Moreover, if your loan is approved, you can receive funds in as little as one business day. Wait! Are you sure that your credit score is so bad? People with bad credit get approved on personal loans with APR between 15% to 35.99%. Try them before you apply for alternative payday loans. $1,000 - $15,000 0 34% - 155% 1 Day 6 – 60 Months $500 - $5,000 60% - 299% 1 Day 4 - 26 Months $50 - $500 151% - 257% 1 Day 1 - 24 Months $50 - $1,000 35.99% - 211% 1 Day 1 - 6 Months
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Best Alternative Payday Loans for Bad Credit of January 2026
If you’re looking for a more viable alternative to traditional payday loans with 400% APRs, you’ve come to the right place. In this guide, ElitePersonalFinance, we’ll walk you through all legit loan opportunities and the best alternative payday loan options for bad credit from reputable marketplaces like MoneyMutual and PickALender, as well as installment lenders such as RiseCredit and OppLoans.
Why Should I Trust ElitePersonalFinance
At ElitePersonalFinance, we understand that there are literally hundreds of marketplaces promising “instant approval” or “no credit check” loans, only out to take your money. It’s been our mission to provide only the most legit, transparent lenders with no hidden fees or excessive APRs so that you can get back on solid Financial footing.
From MoneyMutual to OppLoans, PickALender, and NetCredit, we cover only the most reputable lending opportunities, with a deep dive into Better Business Bureau (BBB) ratings, industry certifications (like OLA membership), Trustpilot reviews, and other criteria designed to make lenders great. Whether it’s credit-builder loans, payroll advance apps, or credit union options, there is a perfect lending opportunity out there for you.
Please keep reading to learn more about the best alternative payday loans for bad credit, including our top recommendations, why you should get an alternative loan, pros and cons of alternative payday lenders, and how to find the best lender for your personal situation.
MoneyMutual
When it comes to Alternative payday loans, the most popular name is MoneyMutual. MoneyMutual connects borrowers with an extensive network of short-term and installment loans, and they’re looking to offer up to $5,000 through a single, streamlined application, an excellent choice for borrowers with limited credit history.
With MoneyMutual, you can receive matches within minutes and receive same-day or next-day funding. Plus, it is a member of the Online Lenders Alliance (OLA). This consumer best-practices organization focuses on Fair lending and adherence to all federal and state regulations regarding APRs, fees, and repayment schedules.
What We Like:
- Loans up to $5,000
- APRs up to 35.99%
- Funding in as little as 24 hours
- Member of the Online Lenders Alliance (OLA)
- Easy and quick online application
What We Don’t Like:
- Not a direct lender
- May not be awarded the maximum loan limit
Eligibility & Next Steps:
- 18 years of age or older
- US citizen or permanent resident
- $800 in minimum monthly income
- Valid checking account, phone number, and email address
- Completed online application through MoneyMutual.com
Terms: MoneyMutual is an online loan marketplace that connects borrowers of all credit types loans of up to $5,000 with APRs as high as 35.99%. MoneyMutual is not a direct lender, so APRs, fees, and repayment terms vary by lender. Actual approval amounts depend on your income, credit profile, and lender requirements. Always read your official loan estimate before signing the contract.
ZippyLoans
ZippyLoans is one of our favorite options for short-term installment loans, connecting you with a legit network of online lenders offering between $100 and $15,000, making it ideal for people with fair or limited credit histories.
Decisions are offered immediately online with funds deposited to your checking account as early as the next business day. Plus, you can get matched 24/7. You only need to meet a daily cutoff to submit your application, compare lenders, and sign on to receive funding by the next day.
Plus, we’re proud to say that ZippyLoans is a member of the Online Lenders Alliance (OLA), which advocates for loan transparency, consumer best practices, and responsible repayment terms. Compared to unregulated Payday Loan websites, ZippyLoans offers a welcome option for all borrowers with bad credit.
What We Like:
- Loan amounts from $100 to $15,000
- APRs up to 35.99%
- Availability 24/7 to be connected to legit lenders
- Member of the Online Lenders Alliance (OLA)
- Simple and easy to use online application
What We Don’t Like:
- Not a direct lender
- APRs and terms depend on the lender
- No guarantee of being offered maximum loan amounts
- Higher interest compared to bank and credit union loans
Eligibility & Next Steps:
- Must be 18 years of age or older
- US citizen or permanent resident
- Valid Social Security number
- An active checking account and a regular source of income
Terms: ZippyLoans is a comparison platform that connects borrowers of all credit types to a large network of direct lenders offering $100 to $15,000 with APRs up to 35.99%. ZippyLoans is not a direct lender. Loan availability varies by state, and higher APRs may apply compared to banks or credit unions. Always read your official loan estimate before signing the contract.
PickALender
One of our preferred loan marketplaces, PickALender, provides access to hundreds of direct lenders offering bad-credit and alternative payday loans. Loan amounts vary by lender, but you can expect to borrow up to $5,000 with flexible repayment terms and same-day funding.
Plus, PickALender offers a quick way to evaluate multiple offers from participating lenders using a single form. Don’t expect to see any predatory storefront payday lenders listed here, so you can find the emergency cash you need to cover all of Life Unexpected’s expenses with peace of mind.
Thanks to PickALender’s transparency, it has received industry recognition from leading consumer finance review sites. Plus, it holds TrustedSite certification and follows Online Lenders Alliance (OLA) best practices, making it an excellent choice compared to unregulated Payday lenders looking to scam you by the minute.
What We Like:
- Loans up to $5,000
- Same-day approval is possible
- Soft credit inquiry upon pre-qualification
- Transparent rate in terms of comparisons
- Member of the Online Lenders Alliance (OLA)
What We Don’t Like:
- Not available in all states
- Rates and terms vary by lender
- No customer phone support
- Third-party lenders make sure the data is with marketing services
- May not be eligible for the maximum loan amount
Eligibility & Next Steps:
- 18 years of age or older
- US citizen or permanent resident
- Valid Social Security number
- Steady income & active checking account
- Completed online application through PickALender
Terms: PickALender is an online lending marketplace that helps borrowers of all credit types compare emergency loan offers from a wide network of participating lenders offering up to $5,000. It is not a direct lender. Availability may vary by state and lender underwriting standards. Always read your official loan estimate before signing the contract.
OppLoans
If you’re looking for a solid choice in the alternative payday loan market, look no further than OppLoans, which offers short-term loans of up to $4,000 for bad-credit borrowers. Repayment terms also range up to 24 months, and many lenders report on-time payments to Experian, Equifax, and TransUnion.
Plus, OppLoans has achieved an A+ rating from the Better Business Bureau.
What We Like:
- Lower APRs than traditional payday loans
- Reports on-time payments to Experian, Equifax, and TransUnion
- A+ BBB accreditation
- Same-day funding available
What We Don’t Like:
- Not available in all states
- Higher APRs than bank loans
- No joint or cosigner loans available
- Need to have a positive employment history
Eligibility & Next Steps:
- At least 18 years of age
- US citizen or permanent resident
- Completed OppLoans online application
- Recurring income within 90 days in bank account transaction history
Terms: OppLoans offers loans for borrowers of all credit types, with loan amounts up to $4,000 and repayment terms up to 24 months. It is not a payday lender. Rates, loan limits, and availability depend on your income, state regulations, and underwriting criteria. Always read your official loan estimate before signing the contract.
RiseCredit
RiseCredit is another highly recommended online installment lender offering loans between $500 and $5,000. Plus, its repayment structure differs from traditional payday loans, with terms of 4 to 26 months and fixed monthly payments. Like OppLoans, you can also report on-time payments to the free credit bureaus, helping you improve your financial standing.
One of the best features of RiseCredit is its flexible repayment schedules. Plus, you can take advantage of lower rates in the future with consecutive on-time payments. RiseCredit also provides a robust suite of financial tools that help you make better decisions, such as budgeting guides and loan calculators. It’s a far cry from storefront payday lenders and offers no resources whatsoever.
Not to mention RiseCredit, which has numerous distinctions, including an A+ rating from the Better Business Bureau (BBB) and regular recognition in US News & World Report as a leading bad credit loan provider.
What We Like:
- Loans from $500 to $5,000
- Repayment terms for 4 to 26 months
- Rate reductions for positive credit history
- Reports on-time payments to credit bureaus
- A+ Better Business Bureau rating
- Member of the Online Lenders Alliance (OLA)
What We Don’t Like:
- Not available in all states
- May charge origination or processing fees
- Higher APRs than banks and credit unions
- Not the most intuitive online website
Eligibility & Next Steps:
- 18 years of age or older
- US citizen and permanent resident
- A steady source of income and an active checking account
- Completed application through the RiseCredit website
Terms: RiseCredit offers online installment loans to borrowers of all credit types, with loan amounts between $500 and $5,000 and repayment terms from 4 to 26 months. APRs may be higher than traditional bank loans. RiseCredit is not available in all states, and actual loan terms depend on the lender and your financial profile. Always read your official loan estimate before signing the contract.
NetCredit
Promising to help you “find the credit you’ve been looking for,” Chicago-based NetCredit offers “credit to the people” with online notes up to $10,000.
6 – 60 months repayment terms in the Francisco bank account, and is as early as the next business day. Plus, it offers a separate revolving credit line of up to $4,500 with increased flexibility, and you can draw as often as you’d like.
Plus, NetCredit has achieved an impressive average TrustScore of 4.8 across more than 31,000 reviews on Trustpilot, as well as a 4.9 average star rating across close to 2,000 reviews on ConsumerAffairs. These two leading third-party review sites praise NetCredit for its transparency and loan availability.
All in all, NetCredit is an excellent choice for any bad-credit borrower looking for quick/emergency cash to cover unexpected expenses.
What We Like:
- 6 to 60-month repayment terms
- Funds by the next business day
- Partners with Capital Community Bank and Republic Bank & Trust Company
- Average 4.8 TrustScore across more than 31,000 reviews on Trustpilot
What We Don’t Like:
- Higher than average APRs
- Not available in all US states
- Origination or late payment fees apply
- No joint or cosigned loan options
Eligibility & Next Steps:
- 18 years of age or older (19 in Alabama and Delaware)
- US citizen or permanent resident
- Valid Social Security number
- Active checking account in good standing
- Steady source of income
Terms: NetCredit provides installment loans for borrowers of all credit types, offering up to $10,000 with repayment terms from 6 to 60 months. It also offers a revolving credit line of up to $4,500, depending on availability in your state. NetCredit partners with FDIC-insured banks such as Capital Community Bank and Republic Bank & Trust Company to originate loans. Loan terms are based on income, creditworthiness, and state regulations. Always read your official loan estimate before signing the contract.
LendUp
LendUp, which promises fast approval for payday loans, offers loans from $100 to $2,500. One of its most prominent features is its “LendUp Ladder” rewards, which reward people with higher loan amounts and lower APRs in exchange for responsible repayment, and provide an opportunity for those rebuilding credit. Funding occurs as early as the next business day.
Plus, LendUp offers no hidden rollover or prepayment fees, along with an intuitive educational platform designed for repeat customers.
With more than 6 million customers nationwide, LendUp is an excellent choice if you are okay with smaller loan limits than those of major online lenders and higher-than-average APRs for lower-tier borrowers.
What We Like:
- Loans from $100 to $2,500
- APRs up to 35.99%
- No hidden rollover or prepayment fees
- “LendUp Ladder” rewards program for repeat customers
What We Don’t Like:
- Not available in all states
- Loan limits only up to $2,500
- Limited customer support options
Eligibility & Next Steps:
- 18 years of age or older
- US citizen or permanent resident
- Proof of income and an active checking account
- Application completed through the LendUp website
Terms: LendUp offers small-dollar loans ranging from $100 to $2,500 for borrowers of all credit types, with APRs that can reach 35.99%. Through the “LendUp Ladder” rewards program, repeat borrowers may receive access to higher loan amounts and potentially lower APRs for responsible repayment. LendUp does not charge rollover or prepayment fees. Always read your official loan estimate before signing the contract.
PossibleFinance
If you’re looking for an excellent alternative to payday loans for bad credit, PossibleFinance is worth a look. It claims it has saved more than $548 million in “predatory junk fees.” PossibleFinance lets you get up to $500 instantly with 0% interest and move payments up to 29 days without paying a rescheduling fee. Plus, there are no fees or penalties.
One of the best things about PossibleFinance is its credit card option that offers a 0% APR. With insurance for a flat monthly fee, you can pay just $8 for a $400 credit line, along with flexible options available. Plus, it also offers a virtual card. Note that this program is by invitation only and requires a quick credit check.
Another upside to PossibleFinance is that it offers financial tools, such as budgeting insights and automated reminders, to help you better manage your finances. Plus, it reports on-time payment history to Experian, as Equifax and TransUnion do, which storefront payday lenders will never do.
What We Like:
Loans up to $500
Approval based on cash flow
On-time payments reported to Experian, Equifax, and TransUnion
Funding as early as the same day
Easy-to-use mobile app
What We Don’t Like:
- Not available in all states
- Minimum loan amount capped at $500
- Need to have recurring deposits in a checking account
- Higher APRs than banks and credit unions
- No joint or cosigner options
Eligibility & Next Steps:
- 18 years of age or older
- US citizen or permanent resident
- Active checking account with direct deposits
- Application completed through the PossibleFinance mobile app
Terms: PossibleFinance offers small installment loans up to $500 for borrowers of all credit types, with approval decisions based primarily on cash-flow data instead of credit scores. PossibleFinance also offers a 0% APR credit line for eligible users by invitation. Loan limits, availability, and funding times vary by state and income requirements. Always read your official loan estimate before signing the contract.
FigLoans
Texas-based FigLoans is one of our preferred payday loan alternatives. Featured on popular sites like Business Insider, Credit Karma, and US News and World Report, FigLoans offers installment loans from $300 to $1,000 with flexible payment terms and no hidden fees. Como tuve tengo Toyota. Plus, many of its lenders report on-time payments to all three major credit bureaus, helping you rebuild your credit.
Another focus area of FigLoans is its excellent third-party reviews. As of this writing, it has achieved a 4.9 out of 5-star rating across more than 8,600 reviews on Trustpilot, with many customers citing more reasonable terms than other online lenders and easy/fast approvals.
All in all, FigLoans’ combination of fixed-rate repayment terms and next-business-day funding makes it an excellent option for fair- and poor-credit borrowers looking for emergency cash.
What We Like:
- Loans from $300 to $1,000 for fair/poor credit borrowers
- Reports to Experian, Equifax, and TransUnion
- Funding by the next business day
- 4.9 out of five-star rating across 8.6K+ Trustpilot reviews
- Transparent pricing with no hidden fees
What We Don’t Like:
- Not available in all states
- Smaller loan amounts up to $1,000
- Higher than average APRs
- Strict income verification requirements
Eligibility & Next Steps:
- 18 years of age or older
- US citizen or permanent resident
- Active checking account
- Proof of recurring income
- Complete the online application through the FigLoans website
Terms: FigLoans provides installment loans from $300 to $1,000 for borrowers of all credit types. APRs may be higher than bank loans, but FigLoans features no hidden fees, fixed monthly payments, and next-business-day funding. Loan terms vary by state, and strict income verification may apply. FigLoans is not available in every state. Always read your official loan estimate before signing the contract.
What Are Alternative Lenders for Very Bad Credit?
When you’re dealing with terrible credit, traditional lenders like banks are typically out of reach. That’s why we highly recommend alternative lenders that can evaluate you based on criteria beyond your FICO score, such as income, cash flow, and deposit patterns. It’s a welcome reprieve for anyone seeking emergency funds without being charged 400% APR on predatory storefront payday loans or having their vehicle seized for nonpayment on auto loans.
Here are five types of alternative lenders to consider:
Online Lenders
Another viable option for alternative loans is legit online installment lenders like MoneyMutual and PickALender, which offer loans of up to $50,000 on an installment-based repayment plan with structured monthly payments and terms as long as 60 months, with loan terms varying by state.
Plus, platforms like RiseCredit even reward borrowers for making on-time payments with rate reductions. In turn, OppLoans reports your payment history to Equifax, Experian, and TransUnion, helping you build your credit history over time.
Many of these allow you to compare multiple loan offers using a single app and a 5-minute application, a feature not provided by traditional banks or credit unions.
Credit Unions
If you’re looking for small-dollar loans, consider payday alternative loans and even secured loans. Credit unions are an excellent place to start. Places like Navy Federal, First Tech, PenFed, Alliant, and I allow you to take out loans of up to $50,000, along with payday alternative loans with 28% APR caps.
Like many alternative lenders, eligibility is based on your membership standing, income stability, and factors outside your credit score, taking into account individual circumstances.
Credit unions are also popular for secured loan programs that can offer APRs between 3% and 8%. All in all, expect much easier approval than banks.
Cash Advance Apps
If you have bad credit, then cash advance apps offer a welcome, consumer-friendly alternative. Apps like EarnIn, MoneyLion Instacash, Brigit, Dave, Cleo, Chime SpotMe, TILT (formerly Empower), and PossibleFinance allow you to borrow up to $2,000, which is repaid with your next paycheck at 0% interest and no hard credit checks. Several criteria go into determining eligibility, including your spending habits and paycheck amount, allowing users to qualify for emergency cash without turning to predatory payday loans.
Plus, many of our recommended cash advance apps offer additional financial tools, such as overdraft alerts and credit-building features, to help improve your financial health. Not to mention, they also report on-time payments to credit bureaus.
Employer-Sponsored Earned Wage Access (EWA)
Over the past decade, EWA platforms like Payactiv, Even (OneWork), DailyPay, Clair, and Wagestream have enabled workers to receive a portion of their paycheck before their next payday, at 0% APR, through their employer. Like cash advance apps, they often include additional tools, such as overdraft protection and even free financial coaching.
These options are mainly popular with call centers, grocery chains, and healthcare workers from employers participating in the program.
Community Development Financial Institutions (CDFIs)
For borrowers with very low income and terrible credit, CDFIs are another worthwhile option. Organizations like Capital Good Fund, Justine Petersen, and unions offer small-dollar loans from $300 to $4,000 with APRs of 5% to 36%, along with less strict underwriting criteria.
Plus, CDFIs are known for their financial health programs, including free financial coaching and payment plan restructuring that help you make manageable monthly payments. Thanks to its mission-driven, not-for-profit approach, CDFI offers the best combination of small-dollar loans and personalized financial guidance to get you back on your feet.
In short, cash advance apps, employer-sponsored earned wage access, legit online installment lenders, credit unions, and CDFIs are five worthwhile options if you’re looking for alternative payday loans for bad credit.
What Are the Pros and Cons of Alternative Payday Lenders?
When you’re facing emergency expenses, it’s essential to avoid traditional payday lenders that promise “cash in minutes,” often with APRs and inflexible repayment terms that can damage your credit.
Whether it’s MoneyMutual, PickALender, OppLoans, RiseCredit, NetCredit, LendUp, Possible Finance, or FigLoans, let’s take a look at the pros and cons of alternative payday lenders.
Pros:
Flexible Repayment Terms
One of the best things about alternative payday loans is that you can avoid outrageous 600% APRs and rely on an actual installment loan structure where you make fixed monthly payments over several months. For example, all of our recommended lenders offer significantly lower rates than storefront payday lenders, reflecting their risk profiles.
Plus, with manageable monthly installments paid out over 6 to 24 months, you can do a better job of budgeting for your rent, utilities, and other necessary expenses every month.
No Rollovers
By paying off alternative payday loans in installments, you can avoid rollovers, which charge a fee for extending your loan. It’s not uncommon to see up to $90 in a single one-shot fee.
That’s why we highly recommend alternative lenders like RiseCredit, NetCredit, and FigLoans, which do not participate in rollover programs. By following the structured approach, borrowers can better manage their monthly payments.
Safer Lending Practices
One of the best things about our recommended alternative payday lenders is that they adhere to complete transparency with their terms and conditions. This includes upfront disclosures that spell out APR ranges, fees, repayment terms, and other pertinent information, including total repayment costs. This allows you to evaluate loan terms more effectively and avoid crazy surprises with storefront payday lenders that charge hidden access fees, including rollover fees.
Plus, many of our lenders have achieved accolades such as Online Lenders Alliance (OLA) membership or a Plus rating from the Better Business Bureau. The Better Business Bureau is one of the leading third-party review platforms that allows borrowers to read about complaints.
Credit Building
Another key benefit of using the best alternative loans for bad credit is that on-time payments are reported to the credit bureaus. By going with storefront payday lenders, there’s no chance of reporting positive payment activity, so there’s zero benefit to your credit score.
Cons:
Higher APRs Than Banks or Credit Unions
With alternative payday lenders, you generally see higher rates compared to traditional banks or credit unions. Whereas you may see 8% APRs at banks and pay the alternative loans at credit unions with an APR, it’s not uncommon for alternative lenders to charge 50% or more, thanks to the increased risk assumed by the lender.
Limited Loan Amounts
Although alternative payday lenders offer excellent repayment flexibility, they typically set lower borrowing limits than banks and credit unions. For example, LendUp Max’s loans are around $2,500, whereas Money Mutual caps them at $5,000. At the same time, Possible Finance offers mobile app loans up to $500.
Suppose you’re looking for $5,000 or more, we recommend that you visit a reputable bank or credit union. Remember that alternative payday loans are best used for financial emergencies, not for long-term planning or high-value purchases.
Not Available in All States
One significant issue with payday lenders is that they’re subject to state-by-state regulation, with varying interest caps and licensing requirements. That’s why some of our recommended online marketplaces, like OppLoans, NetCredit, PickALender, FigLoans, and Possible Finance, cannot operate in all states. For example, you can expect New York and West Virginia to have stricter lending caps that prevent many alternative lenders from operating within their borders.
At the same time, lenders may be available in your state, but your application may still be denied due to your income, employment status, or any number of eligibility criteria. Remember that you will also need a minimum monthly income.
When Should I Get an Alternative Loan?
Here are three instances where you may want to consider an alternative loan:
Emergency Funds
If you’re dealing with a time-sensitive emergency, such as unexpected medical expenses, an alternative loan may be a good option. A quick $700 to repair your car so that you can continue working for your employer may provide same-day funding or by the next business day, allowing you to avoid exorbitant APR charges to buy from storefront payday lenders with full repayment on your next paycheck.
Rebuilding Credit
Many alternative lenders report on-time payment history, thanks to Experian, Equifax, and TransUnion, making them excellent credit-building tools. Additionally, this establishes a stepping stone toward lower interest rates on financial products, including mortgages and auto loans. For example, if you take out a $1,000 FigLoan and make on-time payments every month, you can see your credit score jump by as much as 100 points within a few reporting cycles.
Having a Clear Plan
If you have a steady, predictable income and a budget that makes monthly payments comfortable, then alternative loans could be a good short-term, stopgap solution. It should be reasonable for a professional earning $3,500 per month to handle a $240 monthly installment with OppLoan, with no risk of falling into a debt cycle.
However, if you have inconsistent income (e.g., as a delivery or Uber driver), then the rest may outweigh the benefit.
As a best practice, you should only take on a loan if you can cover the next 60 to 90 days of repayment without taking out another loan.
What Are the Risks of Getting an Alternative Loan?
Unfortunately, as with any loan, there are risks to getting an alternative loan. It’s vital that you fully understand all risks before applying.
Here’s a closer look at what you can expect if you don’t manage your debt responsibly:
Higher Total Borrowing Costs
Although alternative lenders do a much better job of APRs than payday lenders, they are more costly than banks, credit unions, and some online lenders. You can expect APRs to climb to 35.9% or higher, though not all lenders in lending networks match that rate, depending on your credit risk. Even if monthly payments look good, you can expect hundreds, or even thousands, in total repayment costs.
For example, it’s not uncommon for a 1500 installment loan from RiseCredit to increase to $3,000 if you do not pay it off early.
Limited Loan Amounts
Another risk to using alternative payday lenders is that you will most likely see lower borrowing limits than traditional personal loans from banks and credit unions. Although the advertised max loan amounts may be $50,000, you can generally expect to be offered anywhere between $300 and $2,500.
If you need a large amount for emergencies, such as expected medical bills or car repairs, you may exceed the air maximum limit.
Automatic Withdrawals
If you rely too heavily on alternative payday lenders, you can have your monthly budget stretched thin by automatic withdrawals from your checking account. If you do not have enough funds in your checking account, you may incur overdraft or return payment fees, which are not charged by the lender but by your bank.
How to Find the Best Alternative Lender for Me?
Alternatives to Alternative Loans For Bad Credit (e.g., payroll advance, Earnin/Dave, credit unions, BNPL, gov/org resources)
How We Picked These Lenders
Notwithstanding “fast cash” or “instant approval.” it’s not the end-all be-all when it comes to the best alternative payday loans for bad credit. Today, we’ve compiled our guide to legit, regulated lenders, a far cry from unregulated payday storefronts all over the place.
Whether it’s Money Mutual, LendUp, or any of our recommended options, we evaluated each lender based on four key criteria: loan structure, safety, funding speed, credit-building ability, and accessibility.
Let’s take a deep dive into what each of these means:
Loan Structure
One of the biggest draws of our best alternative payday loans for bad credit is affordability. If you have a lower credit score, you should not have to suffer from higher-than-average APRs, excessive rates, or repeated rollover fees that can put you in a vicious cycle of debt.
Instead, we prioritized lenders that offer installment-style repayment with fixed monthly payments and no hidden costs. We also prioritized clear enough front-foot disclosures. All of our recommended lenders clearly state their APR ranges, repayment terms, and other conditions in plain, easy-to-read language. Plus, many of them report on-time payments to Experian, Equifax, and TransUnion, which is not something traditional payday lenders are known for.
All in all, it’s not about paying three to four times the amount borrowed and going into a loan you’re comfortable with.
Safety
Another aspect of how we pick these lenders is their legitimacy. All of our recommended lenders follow federal and state lending regulations, with clearly disclosed APRs and no promises of no-credit-check or instant decisions, along with exorbitant APRs of 400%+.
Plus, we’re powerful advocates of industry recognition, with many of our lenders enjoying Online Lenders Alliance (OLA) membership, A+ Better Business Bureau (BBB) ratings, and a high ratio of positive to negative third-party reviews on Trustpilot and Consumer Affairs. For example, OppLoans has an A+ Better Business Bureau rating, and NetCredit has earned more than 31,000 reviews to date, with an average TrustScore of 4.8, which is a testament to lenders’ focus on transparency and fair consumer lending practices.
Funding Speed
Forget about promises of instant cash; go with our recommendations, and we can provide for same-day or next-day funding once your application is approved. Plus, they even use an automated verification tool so that all of your eligibility criteria, such as employment and income, can be verified without slowing down the process.
Even if you have bad credit, you can still receive quick decisions without falling into predatory loans or storefront payday lenders.
Credit Building Ability
One of the most overlooked benefits of reputable alternative payday loans for bad credit is the ability to build credit over time. Traditional storefront payday loans do not report on-time payment activity to the three credit bureaus, meaning you have no benefit even if you pay back all of your debt.
In contrast, most of the recommendations on our list call for on-time monthly payments, which are beneficial for borrowers with scores in the 500-600 range who are trying to get back on their financial footing. In some cases, you may even be offered hardship or forbearance programs that allow you to avoid delinquencies that could drop your credit score by 50 to 100 points or more.
Accessibility
One of the best things about our recommended alternative payday loans for bad credit is accessibility: you’re assessed based on other approval criteria outside of your credit score, such as your income consistency and employment history. This makes approval much more likely for borrowers who may have had issues paying off debt in the past. At ElitePersonalFinance, we’re proud to connect borrowers with options that are within reach.
Frequently Asked Questions
Are alternative loans better than payday loans?
We highly recommend alternative loans over payday loans, which offer lower, more flexible repayment terms and more precise terms and conditions. Keep in mind that they don’t often charge APRs of 300%+ or more, which can compound further with consecutive rollovers, so you’re paying more interest than principal. Plus, alternative lenders are more likely to report on-time payments to the three credit bureaus so that you can build credit over time.
Can I get an alternative loan with a 500 credit score?
Yes, it’s possible to get an alternative loan with a 500 credit score. However, your options will be limited to some lending networks and credit unions designed for borrowers with poor or thin credit history. Remember that you’re most likely to apply if you can prove strength in other areas outside of your credit score, such as income stability and banking activity.
Can I get a $2,000 loan that isn’t expensive like a payday loan?
Yes, you can take out a $2,000 loan without falling into the predatory depths of payday loans. Many credit unions offer reasonable APRs and installment-based repayment plans. At the same time, online lending platforms allow you to compare multiple competitive offers to find the lowest APR and most flexible terms. Always watch out for any lenders that charge hidden fees.
Why don’t we recommend payday and auto title loans?
We don’t recommend payday and auto title loans since they’re designed to trap borrowers in deep cycles of debt with exorbitant APRs and strict repayment terms, including the possibility of consecutive rollovers. Plus, auto title loans put your vehicle at risk if you default on payments. No wonder many borrowers end up rolling over these loans repeatedly without ever touching the principal balance.
Can I end up in a debt cycle with these loans, and who can help me then?
Yes, payday and auto-title loans are known for putting borrowers in a deep cycle, forcing them to take out additional loans to cover the first one. If you find yourself having difficulty making repayments, you can turn to nonprofit credit counselors who can structure a repayment plan to fit your monthly budget. Alternatively, contact state consumer protection agencies, which can step in if you feel you’re facing unfair or aggressive collection practices.
Who can help with a debt cycle?
Many organizations can help you break out of a debt cycle, including Money Management International (MMI), GreenPath Financial Wellness, and the National Foundation for Credit Counseling (NFCC). Both organizations have dedicated counselors who can help you set up structured debt management plans and negotiate directly with creditors. Plus, community-based CDFIs like Self-Help Credit Union can offer small-dollar alternatives or refinancing options.
Conclusion
Alternative payday loans can be a workable solution and a much better option than traditional payday lenders with excessive traps overseas. By focusing on legitimate platforms with respectable APRs, flexible terms, credit-building opportunities, and fixed repayment schedules, you can rest easy knowing you will not fall into a vicious debt cycle.
