Need money fast? Better options than a payday loan

What a payday loan really costs

Payday lenders usually charge a fee instead of interest, often $10 to $30 for every $100 you borrow, depending on your state. A common fee of $15 per $100 on a two-week loan works out to an APR of almost 400%.

So borrowing $300 at $15 per $100 means paying back $345, usually all at once on your next payday. There can be other costs, too, like late fees or bank fees if a payment bounces.

Watch out for the rollover trap

If you can't repay on time, some lenders let you roll over or renew the loan by paying just the fee. That fee doesn't reduce what you owe. With the $300 example, rolling it over once means paying $90 in fees and still owing the full $300.

If you already have a payday loan you can't repay, ask the lender about an extended payment plan before you roll it over. Many states limit or ban rollovers.

Credit union payday alternative loans (PALs)

Federal credit unions can offer small payday alternative loans with an APR of no more than 28% and an application fee of no more than $20. They can't be rolled over, and you can have only one at a time and no more than three in six months.

• PAL I: $200 to $1,000, paid back over one to six months. You need to have been a member for at least one month.
• PAL II: up to $2,000, paid back over one to 12 months. There's no required waiting period after you join, though a credit union can set its own.
• Not every federal credit union offers PALs, so ask before you join.

Ask your creditors and utilities for more time

If the money is for a specific bill, call that company first. Many card companies have hardship programs, and it's worth asking your utility or landlord whether they can offer a payment plan. Get any agreement in writing.

For energy bills, the Low Income Home Energy Assistance Program (LIHEAP) can help. Call the National Energy Assistance Referral line at 866-674-6327 to find your office.

Call 211

Dial 211 from any phone, or go to 211.org, to reach a confidential service that connects people with help for rent, utilities, food and other bills in their community.

Other places to turn

A few more options can cost much less than a payday loan.

• Ask your employer whether it offers a paycheck advance. If it's through an app, check for fees or tips before you use it.
• A credit card cash advance usually costs more than a regular purchase, but typically less than a payday loan.
• A loan from family or a friend can work if you agree on the terms clearly.
• A nonprofit credit counselor can help you build a budget so the next emergency is easier. The NFCC can connect you at 1-800-388-2227.