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Payday loan alternatives in Alabama

Compare 3 federal credit unions that offer short-term loans with rates capped at 28%.

If you need money fast and don’t have the credit to qualify for a traditional personal loan, you might consider taking out a payday loan. But with APRs in the triple digits — or higher — these high-cost loans are best saved as a last resort. Instead, look into a payday alternative loan (PAL) — available at several federal credit unions throughout Alabama. And if you’re tired of borrowing monthly just to get by, there are some government assistance programs that could help cover some of your day-to-day expenses to loosen your budget.

3 federal credit unions that offer payday alternative loans in Alabama

To counteract the high cost of typical payday loans that can leave borrowers stuck in a cycle of debt, many federal credit unions have started offering PALs to their members. These loans are regulated by the National Credit Union Administration (NCUA), which sets limits on rates and terms. You can typically borrow anywhere from $200 to $1,000 with terms up to six months and APRs capped at 28%.

Below are a few federal credit unions in Alabama that offer PALs:

Federal credit unionLocationsLoan amountsAPRsLoan termsEligibility requirements
Florence Federal Credit Union
  • Florence
Not stated23% with autopayUp to 6 months
  • Become a member by paying a $1 membership fee and depositing $25 into a share account
Redstone Federal Credit Union
  • Arab
  • Athens
  • Big Cove
  • Decatur
  • Hartselle
  • Harvest
  • Huntsville
  • Madison
  • Meridianville
  • Redstone Arsenal
  • Scottsboro
$200 to $50026% with autopay — including a $20 application fee1 to 6 months
  • Member for 6+ months — you can qualify for membership through over 1,500 organizations
Five Star Federal Credit Union
  • Cottonwood
  • Dothan
  • Eufaula
$500 to $2,50018% — including a $35 or $45 application fee depending on the size of your loanNot stated
  • Member for 6+ months — you can qualify for membership if you live, work, worship or attend school in a qualifying county
  • $500+ direct deposit each month for six months from the same company

The ins and outs of how payday alternative loans work

5 resources and programs for Alabama residents

If you’re struggling to cover day-to-day expenses like buying groceries or paying for child care, you might qualify for one of these government assistance programs. Some are funded through the federal government, while others are offered strictly to Alabama residents.

Supplemental Nutrition Assistance Program (SNAP)

  • What it provides: Monthly benefits to buy groceries
  • Who’s eligible: Low-income households

The Food Assistance Division of the Alabama Department of Human Resources manages the state’s food assistance program. Qualifying low-income households will receive an Electronic Benefits Transfer (EBT) card to buy groceries each month.


  • What it provides: Funding for medical and healthcare services
  • Who’s eligible: Low-income children, individuals with a disability, nursing home residents and low-income individuals who also have Medicare

This federally funded program is offered through the Alabama Medicaid Agency. It provides funding for medical and other healthcare services to qualifying individuals and families.

Temporary Assistance for Needy Families

  • What it provides: Cash assistance for basic needs
  • Who’s eligible: Low-income families with children under the age of 18 or 19

The Family Assistance Division of the Alabama Department of Human Resources offers temporary cash assistance to low-income families with children under the age of 18 or 19. Any parents who receive funds through this initiative are also given work and training services to help find and keep a job.

Child Care Services

  • What it provides: Affordable, quality child care
  • Who’s eligible: Low- and moderate-income parents who are employed or in school

Funded through the Child Care and Development Fund, this program gives low- and moderate-income families access to affordable and quality child care. How much you have to pay is determined based on a sliding scale. To qualify, your family’s income must be at least 130% below the federal poverty level. You also need to be employed or enrolled in school to be eligible.

Low-Income High Energy Assistance Program

  • What it provides: Financial assistance for home energy costs
  • Who’s eligible: Low-income households

Funded by the US Department of Health and Human Services, this federal program offers financial assistance for home energy costs to low-income households in Alabama. Eligibility is based on your annual income and how many people you have in your household. You can find out if you qualify on the website.

Consider an installment loan instead

If you’ve decided to get a short-term loan, consider these installment loan providers that offer loans with longer repayment terms than a typical payday loan.

Name Product Filter Values Loan amount Turnaround time Requirements
OppLoans Installment Loans
$500 to $5,000
1 business day
Direct deposit, meet minimum income requirements, live in eligible state
Comes with the option to change your due date so you won’t fall behind on repayments.
$1,000 to $25,000
2 to 3 business days
Be employed, have a US bank account, live in a state where Stilt operates, hold one of the following visas: F-1 and OPT, H-1B, H4, O-1, L-1, TN, J-1, DACA or be a US citizen.
No green card? You could still qualify for a personal loan.
Fast5kLoans Short-term Loans Connection Service
$100 to $35,000
As soon as the next business day
Regular source of income, verifiable bank account, US citizen, ages 18+
Get connected with multiple lenders you might qualify with — even if you have bad credit.
LendYou Short-term Loans
$100 to $2,500
Same business day to 1 business day
$1,000+ monthly income, direct deposit, US citizen or permanent resident, ages 18+
Get offers from potential lenders in minutes by filling out just one online form.
Monevo Installment Loans
$500 to $100,000
Varies by lender
Credit score of 500+, legal US resident, ages 18+
Quickly compare multiple online lenders with competitive rates depending on your credit.

Compare up to 4 providers

Bottom line

If you’re looking for a low-cost alternative to expensive payday loans, you might want to start by visiting your local credit union. Many of these nonprofit lenders have started offering PALs to help borrowers with poor credit get access to affordable funding. And if you continue to find yourself borrowing to make ends meet, look into government assistance programs available to Alabama residents.

You can find more ways to avoid the high costs of typical short-term loans with our guide to payday loan alternatives.

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