When life throws you a financial curveball and you don’t have the best credit, you might think payday loans are your only option. But with such high rates and short terms, these can leave you in an even worse financial position. Instead, consider taking out a low-cost payday alternative loan (PAL) from a credit union.
Another option is to look into one of several government assistance programs offered to California residents. While these may not be able to put cash in your hands, they can help free up your budget for other expenses that crop up.
3 federal credit unions that offer payday alternative loans in California
Many federal credit unions offer low-cost PALs to help their members get small-dollar financing and avoid the high costs of typical short-term loans. These are regulated by the government with interest rates capped at 28%. You’ll also typically have up to six months — sometimes even longer — to pay off your balance. This means you’re less likely to default — especially considering most payday loans come with a two-week turnaround.
Below are a few federal credit unions in California that offer some sort of alternative to payday loans:
Federal credit union
Locations
Loan amounts
APRs
Loan terms
Eligibility requirements
SchoolsFirst Federal Credit Union
Aliso Viejo
Anaheim
Cerritos
Chino Valley
Corona-Norco
Costa Mesa
CSUF Campus
Cypress
Downey
FountainValley
Fullerton
Garden Grove
Gardena
Glendale
Hesperia
Huntington
Inglewood
Irvina
La Habra
Lake Elsinore
Lancaster
Long Beach
Los Angeles-Ladera Heights
Menifee
Mission Viejo
Moreno Valley
Murrieta
Norwalk
Oceanside
Orange
Palm Desert
Palmdale
Pasadena
Placentia
Rancho Cucamonga
Redlands
Riverside
San Bernardino
San Clemente
San Juan
Santa Ana
Torrance
UCI campus
Valencia
Victorville
Walnut
West Covina
Whittier
Up to $500
17.9%
12 months
Enrolled in direct deposit
Member in good standing
Mid Cities Credit Union
Compton
$100 to $1,000
24.99% — including a $40 or $50 application fee depending on your loan amount
12 months
Member in good standing
No charge-offs or delinquent accounts with the credit union
Struggling to pay for everyday expenses like groceries or rent? You might want to look into these government resources to help pick up the slack when your regular income falls short.
1. California Work Opportunity and Responsibility to Kids (CalWORKS)
What it provides: Financial assistance with housing, food and other necessary expenses
Eligibility requirements:
California resident
US citizen, national, legal noncitizen or permanent resident
Low or very low income
Underemployed, unemployed or about to become unemployed
Pregnant, have a child aged 18 or under OR under 18 and the head of your household
Also known as Temporary Assistance for Needy Families (TANF), this federal program offers financial assistance to cover expenses like medical bills, food, rent and utility bills. You can check if you might qualify for this program on the Benefits.gov website.
2. Cash Assistance Program for Immigrants (CAPI)
What it provides: Financial assistance for immigrants who don’t qualify for Supplemental Security Income (SSI)
Eligibility requirements:
Aged 65+ or living with a disability
Qualifying immigrant OR permanently residing in the US under color of law (PRUCOL)
Meet federal SSI income and assets criteria
CAPI provides financial assistance to permanent residents and other qualifying immigrants who aren’t eligible for Social Security or other benefits. You can find out if you qualify by reading the California Immigrant Policy Center’s factsheet on the program.
3. CalFresh food assistance program
What it provides: Financial assistance to pay for groceries
Who’s eligible: Low-income individuals and families
Also known as the Supplemental Nutrition Assistance Program (SNAP), CalFresh is a federally funded program that offers financial assistance to low-income households to help pay for groceries. How much you qualify for depends on your household size, income and monthly expenses. You’ll receive an Electronic Benefits Transfer (EBT) card that you can use to buy food at any participating grocery store or farmers market.
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.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
Before taking out a high-cost payday loan, consider looking into the short-term loan options available at credit unions in your area. Many offer PALs with lower rates and longer terms than traditional short-term loans. And if you find yourself consistently needing extra funds to get by, you might want to look into the many government assistance programs open to Californians.
Yes, most federal credit unions have lenient credit requirements to qualify for a PAL. However, most want to see you have a steady source of income and the ability to repay the loan on time.
California state law caps APRs for a 14-day payday loan of $100 at 460% — much higher than the 28% APR cap of PALs.
Jennifer Gimbel is senior managing editor at Policygenius and a former editor at Finder, specializing in personal finance. Jenn's expertise and analysis has been featured on MediaFeed and other outlets. She holds a BS in arts administration from Wagner College, with minors in economics and journalism.
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