A payday alternative loan, or PAL, is a small loan from a federal credit union designed as a cheaper substitute for payday borrowing. The National Credit Union Administration sets the rules.
PAL I vs PAL II
| PAL I | PAL II | |
| Amount | $200 to $1,000 | Up to $2,000 |
| Term | 1 to 6 months | 1 to 12 months |
| Maximum APR | 28% | 28% |
| Application fee | $20 or less | $20 or less |
| Membership wait | At least one month | None |
How to Qualify
You must be a member of a federal credit union that offers PALs. Credit unions set their own approval criteria, and the rules do not specify a minimum credit score. Not every credit union offers PALs, so call and ask.
PAL vs Payday Loan
A $300 PAL at 28% APR over one month costs about $7 in interest. A typical payday loan charges $15 per $100, or $45, for two weeks. Check our payday loan guide to compare the full costs.
How to Find One
Use the credit union locator at mycreditunion.gov and ask whether they offer a PAL I or PAL II.
Ready to Apply?
Use the secure form below. If approved, you see the fee, due date and APR before you accept. Approval is never guaranteed.
Cred Qualify does not guarantee approval. Loan availability, amounts, fees and terms vary by state. Payday loans are meant for short-term needs and are not a long-term financial solution.