Ranking payday loan alternatives by APR
Updated 2026-11-11 · Sources: CFPB, MyCreditUnion.gov (NCUA)
The annual percentage rate, or APR, is the fairest way to compare small loans, because it turns fees and interest into one yearly figure. By the published numbers, a typical two week payday loan costs far more than a credit union Payday Alternative Loan or a credit card.
MyCreditUnion.gov puts it plainly: the APR is the best way to compare loans and credit cards and see which option may be safest and least costly. eFundingFlow is not a lender; this guide only uses figures from the CFPB and the NCUA.
Why a small fee can be a big APR
Payday loans are often priced as a fee rather than interest. MyCreditUnion.gov gives this example: borrow $100 with a fee of $15, due in two weeks, and you repay $115. Spread over a year, that fee equals an APR of 391%. The CFPB describes the same typical fee as an APR of almost 400 percent.
Lenders must show you the APR before you sign a loan agreement, so you can always compare on the same footing.
The ranking, lowest APR first
| Option | APR figure | Source |
|---|---|---|
| Federal credit union loan that is not a PAL | Maximum 18% | MyCreditUnion.gov (NCUA) |
| Credit union Payday Alternative Loan (PAL) | Maximum 28% | MyCreditUnion.gov (NCUA) |
| Credit card | About 12% to 30% | CFPB |
| Typical two week payday loan | Almost 400% | CFPB |
Routes with no interest at all, such as a later due date agreed with the company you owe or help from family, sit above every row in this table. The CFPB and MyCreditUnion.gov both list them first.
What the 36% line means
MyCreditUnion.gov notes that most financial experts agree the APR should not exceed 36% for a loan to be affordable. Separately, the CFPB explains that the federal Military Lending Act caps the Military Annual Percentage Rate at 36 percent for active duty servicemembers and their dependents.
APR is not the whole story
For a loan that lasts only a few weeks, also look at the total dollars you will repay and the date it is due. Ask whether the loan can be rolled over, and what that would cost. The CFPB example shows a rollover adding another fee while the full balance is still owed.
- Check the APR on every offer.
- Check the total amount to repay and the due date.
- Ask about late fees and rollovers.
- Compare against at least one cheaper route.
Where eFundingFlow fits
A short term loan is usually the highest cost route on this list. If the cheaper ones do not work for you, eFundingFlow can send one request for $100 to $5,000 to lenders in its network. Any lender that makes an offer must show its APR; read it and compare before you accept. APRs on short term loans can exceed 200%.
Quick answers
What APR does a payday loan have?
The CFPB says a typical two week payday loan with a $15 per $100 fee works out to almost 400 percent APR.
Is 28% APR a lot?
It is the maximum for a credit union PAL, and it is far below a typical payday loan, by the CFPB and NCUA figures.
Related reading: Joining a credit union to borrow a small amount and A slow month in a side business.