Credit Union Payday Alternative Loans (PALs) Explained
Updated November 1, 2026
90 Day Loan is an independent information site, not a lender or loan broker, and does not make credit decisions. Guides are general information, not financial advice.
If you need a short-term loan, a PAL is often the cheapest legitimate option. Not every credit union offers them, so ask before you join.
PAL I vs PAL II
| PAL I | PAL II | |
|---|---|---|
| Loan amount | $200 to $1,000 | Up to $2,000 |
| Term | 1 to 6 months | 1 to 12 months |
| Membership required first | At least 1 month | None (you can apply when you join) |
| Max APR | 28% | 28% |
| Application fee | Up to $20 | Up to $20 |
| Loans at once | Limits apply; no rollovers | Limits apply; no rollovers |
A 90-day PAL in numbers
| APR | Monthly payment (3 payments) | Total repaid | Total interest |
|---|---|---|---|
| 18% | $171.69 | $515.07 | $15.07 |
| 28% | $174.50 | $523.51 | $23.51 |
Our own calculation: $500 borrowed, equal monthly payments, simple amortization, no fees. Real offers add origination or late fees and may use other payment schedules.
Even at the 28% cap, borrowing $500 for three months costs under $15 in interest in our example, plus up to a $20 application fee.
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How to get one
- Find federal credit unions near you, or ones you qualify for by employer, location or association, using the NCUA locator.
- Ask whether they offer PAL I or PAL II loans (some call them "small-dollar" or "quick cash" loans).
- Join, deposit the minimum share, and apply. Many decide quickly.
This guide is general information, not financial advice. Loan rules, rate caps and which products are allowed differ by state. Check a lender's license with your state regulator before you apply.
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Frequently asked questions
Do PALs check credit?
Credit unions set their own underwriting, and many look at your income and account history more than your score.
Do state-chartered credit unions offer PALs?
The PAL rule applies to federal credit unions. State-chartered credit unions may offer similar small loans under state rules.
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Sources
- Federal Register: NCUA Payday Alternative Loans (PAL II) final rule
- NCUA: Credit union locator
- CFPB: What is a payday loan?
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