Credible Takeaways
- Both payday loans and cash advances can be expensive, especially if you don’t pay them off quickly.
- Payday loans and cash advance apps can have APRs upward of 400%, while credit card cash advances have APRs of around 30%, plus fees.
- Some cash advances via apps can be low-cost if you don't expedite fund delivery or leave a tip.
- Consider alternatives like personal loans, financial assistance, and payday alternative loans — especially if you can’t repay a payday loan or cash advance quickly.
It’s never fun to find yourself in a situation where you’re short on cash. When those situations happen, you may wonder whether you should take out a payday loan or a cash advance from your credit card or a cash advance app.
It’s important to understand how much you’ll pay to borrow via any of these options in order to determine which to use, and if you’ll be better off with another type of loan.
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What is a payday loan?
A payday loan is a short-term, high-cost loan, usually for amounts up to $500 — though loan maximums vary by state. Payday lenders, rather than banks or credit unions, offer payday loans.
When you get a payday loan, you may leave a check with the lender dated for your next payday that includes the amount you're borrowing plus fees and financing costs. And you walk away with cash or a check. Some lenders may fund your loan via direct deposit, which can take a couple of days.
Unlike installment loans, payday loans are usually due in full within two to four weeks of receiving the loan. But certain lenders may allow you to renew the loan and extend the due date for an additional fee. But this can get expensive.
Depending on where you live, the cost of a payday loan can be extremely high. Payday lenders may charge $10 to $30 per $100 you borrow, which equates to triple-digit annual percentage rates (APRs). For example, in the state with the highest payday loan costs, Idaho, lenders charge an average payday loan APR of 652%.
Learn More: Payday Loan Requirements
Alternative option
Payday alternative loans (PALs) are a much more affordable alternative offered by federal credit unions. If you’re a credit union member or can become one, consider a PAL before getting a payday loan.
Pros and cons of payday loans
Payday loans have some serious drawbacks, but they may have a couple of benefits, as well:
Pros:
- No credit check: Unlike with other forms of loans, there’s no credit check required to get a payday loan.
- Immediate funding: Payday loans can typically provide immediate funding.
Cons:
- Exorbitantly high APRs: Payday loans can have APRs well into the triple digits.
- Short repayment terms: Payday loans typically have short repayment terms of two to four weeks — which, coupled with high fees — can make them tough to repay on time.
- Can hurt your credit score if unable to pay off in time: Unpaid loans could end up in collections and hurt your credit score. What is a cash advance?
Learn More: Are Payday Loans Safe?
What is a cash advance?
A cash advance comes in two flavors, via a cash advance app or via your credit card. Both make it easy to borrow money and can be much less expensive than a payday loan.
Cash advance app
Apps don't require a credit check and typically won’t charge interest. Instead, you can expect fees such as a subscription fee, expedited funds fees, and optional tips. However, these fees can equate to APRs on par with payday loans, depending on the app and whether you leave a tip.
You may be able to borrow $100 to $1,000, based on your income and the app. For example, Dave allows up to $500 with no credit check or late fees and the company states you can get your funds in as soon as 5 minutes (with an expedited fund fee). Earnin can offer up to $100 per day (up to $750 per pay period) with no credit check and no fees (unless you expedite funds to your account).
Just like a payday loan, you typically have to repay the advance by your next paycheck.
Credit card cash advance
A cash advance on your credit card allows you to withdraw cash against your credit limit at an ATM or via a check — since you've already been approved for the card, there's no credit check required.
But unlike regular credit card charges, a cash advance immediately starts incurring interest — in other words, there’s no grace period before interest charges kick in. Your cash advance will show up on your next statement, and it’ll be factored into your minimum monthly payment. Cash advances typically have a higher APR than regular credit card transactions.
You’ll also pay a cash advance fee — either a flat fee or a percentage of the transaction — every time you use this service. Getting a cash advance can be an expensive way to borrow money, though usually less expensive than a payday loan and possibly a cash app.
Limits on cash advances vary by credit card company. Some may limit the amount to a percentage of your total credit limit. You can find your cash advance limit on your credit card statement or by calling your credit card company.
Consider a personal loan for bad credit if you need money quickly and don’t want to deal with short repayment terms.
Check Out: Best Credit Cards
Pros and cons of cash advances
Weigh the following before taking out a cash advance via an app or your credit card.
Pros:
- Immediate funding: Cash advances can give you immediate access to cash.
- No credit check: If you have bad or no credit, you don’t have to worry about a credit check with a cash advance app or an existing credit card.
- Accessible at an ATM or via direct deposit: You don’t need to visit a bank or lender — instead, you can get a cash advance deposited directly into your account or at an ATM with your credit card.
- Lower fees: Credit card advances typically charge lower fees than payday loans. If you don't expedite funds or leave a tip, you could pay few to no fees to use a cash advance app.
- Not secured: Cash advances are unsecured, so you don’t need to put up collateral to access cash.
Cons:
- High APRs and fees: Cash advances can have much higher APRs than regular credit card charges, especially if you expedite the money with a cash advance app.
- Interest accrues immediately: Interest starts accruing the same day you get a cash advance with a credit card.
Check Out: Best Emergency Loans
Payday loans vs. cash advances
Payday loans and cash advances make it easy to access cash, but that accessibility comes at a cost. Below, find details on eligibility requirements, repayment terms, fees, and more for payday loans vs. cash advances.
| | | |
|---|
| Varies by state; typically around $500 | | Capped at a percentage of your total credit line |
| Must have source of income, and have a bank account or prepaid card account | You typically must link your bank account to qualify, and have a verifiable source of income. | You must have a credit card that offers cash advance services; credit check required for credit card application. |
| | Due by your next paycheck. | Interest begins accruing immediately; minimum payment due monthly. |
| Depending on your state, $10 to $30 per every $100 borrowed (at $15, this equates to a 400% APR) | Expedited funding fees and tips can add up to triple digit APRs | |
| | Immediately, with expedited transfer fees. Otherwise, it may take 3 to 5 business days, depending on the app | |
| | Subscription fees, optional tips, express funding fee | Cash advance fees, ATM fees |
| If you aren’t eligible for any other form of fast funding — like a cash app or credit card advance, or borrowing from friends/family. | Emergencies, when you need quick access to cash, when you can repay the advance by your next paycheck | Emergencies, if you have an existing credit card that allows cash advances |
Alternative options
Payday loans and cash advances aren’t the best way to borrow, in most cases. However, the following options, if available to you, can be both less expensive and less risky:
- Personal loans: A personal loan can take longer to get and may be more difficult to qualify for if you don’t have good credit. But they tend to have lower interest rates, and they’re usually unsecured. Loan amounts typically range from $1,000 to $100,000 or more, with repayment terms from one to seven years. The average interest rate for a 24-month personal loan was 12.49% in February 2024, according to the Federal Reserve, making them an attractive alternative. Consider a personal loan with a cosigner or a secured personal loan if you have trouble qualifying.
- Payday alternative loans (PALs): If you’ve been a member of a federal credit union for at least one month, you may qualify for a PAL. A PAL is a low-cost, short-term loan offered by certain credit unions for amounts of $200 to $1,000. Terms range from 1 to 6 months. PALs II are another category of payday alternative loans. These loans have maximum amounts of up to $2,000, terms up to 12 months, and immediate eligibility for credit union members (no 1-month waiting period).
- Financial assistance: If you’re really in a bind, you may be eligible for financial assistance from government or nonprofit programs. Start by visiting 211.org to get support and connect with helpful resources.
- Negotiate with creditors: Before taking out a payday loan, cash advance, or personal loan, you may be able to work out a manageable repayment plan directly with your creditors if debt payments are eating up your cash flow. It never hurts to call, explain your situation, and ask what they can do to help. In some cases, they may offer a lower monthly payment or interest rate.
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Advertiser DisclosureOverview
Lightstream is one of three Credible partner lenders to offer loan amounts up to $100,000, which makes it ideal for financing large expenses like home improvements or weddings. Funds are available as soon as the same day you apply, and you'll have up to 12 years to repay certain types of loans, including home improvement loans, RV loans, and boat loans. There are no origination fees, and rates are low — Lightstream's lowest APR beats SoFi's advertised lowest APR by 1 percentage point. But you'll need good credit to qualify.
Unlike most lenders, Lightstream does not let you prequalify on its site. Nor does it provide a contact phone number next to its customer service hours on its website.
Repayment terms
2 - 12 years, depending on loan purpose
Eligibility
Available in all states except RI and VT
Time to get funds
As soon as the next business day
Loan uses
Credit card refinancing, debt consolidation, home improvement, and other purposes
Overview
Upstart has one of the lowest available APRs of Credible partner lenders and of all non-partners we reviewed, making it a good choice for well-qualified applicants. However, it's also is one of few lenders that doesn't have a minimum credit score requirement (if you apply on the lender's website), which makes it an option if you have bad credit or no credit history. Upstart may charge an origination fee as high as 12%, but good-credit borrowers may not be charged one at all.
Trustpilot gives Upstart 4.9 stars, which is the highest of all lenders we reviewed.
Time to get funds
As soon as 1 to 3 business days
Loan uses
Pay off credit cards, consolidate debt, relocate, make a large purchase, and other purposes
Overview
Discover Personal Loans offers low APRs, repayment terms up to seven years, no origination fees, nationwide availability, and doesn't require your Social Security number to prequalify on its site. You'll need to have an annual income of at least $40,000, and a FICO score 660 or higher, to be eligible. If your credit score is fair or poor, you'll need to go elsewhere, as Discover doesn't allow cosigners.
Funds are available as soon as the next business day after loan approval.
Eligibility
Available in all 50 states
Time to get funds
Funds can be sent as soon as the next business day after acceptance
Loan uses
Auto repair, credit card refinancing, debt consolidation, home remodel or repair, major purchase, medical expenses, taxes, vacation, and wedding
Overview
Upgrade has a suite of features that make it a very attractive lender: competitive interest rates, discounts for direct pay and autopay, as soon as same-day funding, up to seven-year repayment terms, and nationwide availability. Plus, loans are available to fair-credit borrowers, and you don't need to input your Social Security number to prequalify on the website. Upgrade even offers secured personal loans, which is not common among lenders.
However, Upgrade does charge an origination fee of 1.85% to 9.99%. You must have a FICO score of at least 600 and a minimum income of $25,000 annually to qualify.
Loan amount
$1,000 to $50,000 ($3,005 minimum in GA; $6,600 minimum in MA)
Loan uses
Credit card refinancing, debt consolidation, home improvement, major purchase, other
Overview
LendingClub is a solid lender for good credit borrowers and some fair credit borrowers that apply directly on its website. It's easy to prequalify with LendingClub, especially if you're uncomfortable providing your Social Security number, as the company doesn't require it at the prequalification stage. (You will need to provide it if you move forward with a full application.)
While prequalification is not a guarantee that you'll be approved for a loan, LendingClub does a better job than most other Credible partner lenders at approving applicants that have successfully prequalified. In other words, you're less likely to have your application declined once you apply (if you've already prequalified). LendingClub may charge an origination fee between 3% and 8%.
Eligibility
Available in all 50 states
Loan uses
Debt consolidation, paying off credit cards
Overview
SoFi stands out for offering no-fee personal loans with competitive rates, high loan amounts, long loan terms, discounts for autopay and direct pay, and funding as soon as the same day. Plus, SoFi prioritizes convenience for existing and potential customers with features like live chat and an easy prequalification process that doesn't require your Social Security number. Once you have a loan with SoFi, you may be eligible for unemployment protection and unemployment assistance.
The main catch is that you need to qualify for a loan with SoFi, which can be hard to do if you don't have good credit. You also won't be able to apply with a cosigner, since SoFi doesn't accept cosigners; nor does it offer secured personal loans.
Fees
Option to pay an origination fee (up to 6%) in exchange for a lower rate
Time to get funds
Typically within a few days, given approval and bank account verification, but sometimes within the same day
Loan uses
Solely for personal, family, or household uses
Overview
Best Egg is a solid lender for a wide range of borrowers and, notably, scored second for personal loan satisfaction in J.D. Power's Consumer Lending Study. It offers competitive rates, reasonable loan terms and amounts, and personal loans for fair credit. You'll need a FICO score of at least 600 to qualify, but the lower your score, the higher your APR may be. The APR includes the interest rate and origination fees, which range from 0.99% to 8.99% with Best Egg.
Note that if you successfully prequalify with Best Egg, you may be more likely to be approved for the loan relative to other lenders you prequalify with. Based on Credible data, borrowers who chose to apply for a loan with Best Egg were more than twice as likely to be approved (relative to most other Credible partners).
Fees
Origination fee, late fee, unsuccessful payment fee, check processing fee
Eligibility
Available in all states except DC, IA, VT, and WV
Time to get funds
As soon as 1 to 3 business days after successful verification
Loan uses
Credit card refinancing, debt consolidation, home improvement, and other purposes
Overview
Avant personal loans are a good choice for borrowers with bad credit looking for small- to moderate-sized personal loans. Loans are available up to $35,000 and you could get the money as soon as the next business day after approval. Plus, Avant is more likely than some lenders to approve the applications of borrowers who've prequalified with Avant. However, the lender charges an origination fee up to 9.99%, and its top-range interest rates are among the highest of the lenders we reviewed.
Fees
Origination fee, late fee, dishonored payment fee
Eligibility
Available in all states except HI, IA, MA, ME, NY, VT, and WV
Time to get funds
As soon as the next business day (if approved by 4:30 p.m. CT on a weekday)
Loan uses
Debt consolidation, emergency expense, life event, home improvement, and other purposes
Repayment terms
1 to 5 years (2 to 5 years through Credible)
Overview
It’s worth considering a personal loan through Splash if you have good credit (ideally, a FICO score above 700). The platform offers loans from a wide range of lenders, and next-day funding is available. Plus, Splash has a live chat feature so you can get real-time answers without having to wait on hold or for an email. Loans are available up to $100,000 if you apply via Splash’s website.
Rates are competitive, but borrowers with excellent credit may find lower APRs elsewhere. If you need a repayment term longer than five years, you’ll need to look elsewhere as well.
Loan amount
$5,000 - $100,000 (up to $35,000 on Credible)
Eligibility
Available in all states except VT. OH and NM net disbursed amount must be greater than $5,000. MA must be greater than $6,000
Time to get funds
Same day available, typically 1-3 days
Loan uses
Debt consolidation, home improvement, medical expenses, major purchases
Overview
Universal Credit is one of a handful of lenders that offers personal loans for bad credit. If your FICO credit score is at least 560, you may be eligible for a Universal Credit personal loan. It offers loan amounts up to $50,000, repayment terms up to seven years, and discounts for direct pay and autopay. Funds are available as soon as the next business day after loan approval.
Note that rates and fees can be relatively high — you may pay an origination fee from 5.25% to 9.99%, and APRs start at 11.69%. If you get a loan with a high interest rate, consider refinancing your personal loan at a lower rate once you've improved your credit score.
Eligibility
A U.S. citizen or permanent resident; not available in DC, IA, SC, WV
Time to get funds
As soon as 1 business day after acceptance
Loan uses
Debt consolidation, pay off credit cards, home improvements, unexpected expenses, home and auto repairs, weddings, and other major purchases
Overview
Happy Money has been in operation since 2009 (formerly known as Payoff). It's an option for fair-credit borrowers (plus those with better credit), and notably has a relatively low top-end APR. In other words, you could qualify for a lower rate with Happy Money with fair credit, relative to other lenders that offer fair-credit loans. The company does charge an origination fee on some loans, up to 5%, but that's not as high as some other lenders' origination fees.
You should be prepared to wait a few days to get your money, as funding can take three to five days once approved. And loans aren't available in Massachusetts or Nevada. Happy Money has an A+ rating with the BBB and is ideal for debt consolidation and credit card consolidation loans.
Eligibility
Available in all states except MA, MS, NV, and OH
Time to get funds
As soon as 2 - 5 business days after verification
Loan uses
Debt consolidation and credit card consolidation only
Overview
BHG Money stands out for offering the largest loan amounts — up to $200,000 — of any Credible partner lenders. Simply put, if you need an unsecured personal loan over $100,000, there are very few places to look, but BHG is one. You'll have up to 10 years to repay the loan, but you'll need an annual income of at least $100,000 to qualify and a FICO score that's 660 or higher. However, if you have a cosigner that meets these requirements, BHG will consider your application.
Loan amounts start at $20,000, so look elsewhere for small loans. And BHG charges a modest origination fee between 2% and 4%, depending on your financial profile. Loan funds are available within three to 14 days of loan approval. Note that you can't prequalify with BHG.
Fees
Origination fees, late fees
Eligibility
Available in all states except Maryland and Illinois
Loan uses
Debt consolidation, baby (adoption), engagement ring financing, moving (relocation), business, home improvement, special occasion, cosmetic procedures, major purchase, taxes, credit card refinancing, medical expenses, vacation, wedding, other
Fees
Origination Fee, $15 Late Fee, $25 NSF Fee
Eligibility
Available in all states except CO, CT, ME, NV, NH, TN, VT, WV, WY, and all U.S. Territories
Time to get funds
Funds typically deposited into your account in 1 business day13
Loan uses
Debt consolidation, credit card refinancing
Overview
OneMain Financial has multiple options for bad-credit personal loans. There is no minimum credit score required (if you apply directly with OneMain), which means you could get a loan with bad credit (FICO below 580). Plus, cosigners are allowed — a cosigner is someone (ideally, with good credit) who promises to repay the loan if you can't, which can make it easier to qualify or lower your rate. And, secured personal loans are available. You secure a loan with collateral, which may also help you qualify or lower your rate.
Rates are higher than competitors and OneMain charges origination fees as either a flat fee up to $500, or a percentage from 1% to 10% (depending on your state of residence). Note that even if you prequalify for a personal loan with OneMain, getting approved isn't a given.
Fees
Origination fee, unsuccessful payment fee, late fee
Eligibility
Must have photo I.D. issued by U.S. federal, state or local government
Time to get funds
As soon as 1 to 2 days after acceptance
Loan use
All except business, and education
Payday loans vs. cash advances FAQ
How do interest rates and fees compare for payday loans vs. cash advances?
Both payday loans and cash advances are often expensive ways to borrow, but payday loans generally cost more. Payday loans typically come with a flat rate per $100 you borrow. In most states, these fees equate to a triple-digit APR. Payday loans can also incur late fees or rollover fees. Meanwhile, cash advance apps have fees that can add up to triple-digit APRs, especially if you pay for same-day funds and leave a tip. Credit card cash advances have an associated transaction fee, potential ATM fee, and a typical APR of around 30%.
Can I get a payday loan or cash advance with a low credit score or no credit history?
Payday loans don’t require a credit check, so you can get one with low or no credit. Typically, all you need is proof of income. To get a cash advance, though, you need to either use a cash advance app like Chime or Earnin or have a credit card that provides the service. If you have an existing credit card, the company won’t typically check your credit for an advance. But if you need to apply for a card, it will.
How does taking out a payday loan or cash advance impact my credit score?
Taking out a payday loan generally won’t impact your credit score. However, if you fail to repay the loan and the lender reports your debt to collections, a debt collector might report it to credit reporting agencies. This could end up hurting your credit. Cash advances will increase your credit utilization, which could lower your credit score.
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Meet the expert:
Emily Batdorf
Emily Batdorf is a personal finance expert, specializing in banking, lending, credit cards, and budgeting. Drawing on her scientific background, she's developed a knack for analyzing financial products in the context of different needs. She finds joy in helping readers understand their best options and shuns a one-size-fits-all approach.
