3 Payday Loan Alternatives: No Credit Needed, Income-Based

Payday Loan Alternatives

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Payday loans can be alluring because they only ask for you to have a paycheck to qualify. They don’t care about your credit.

The good news is that there are alternatives. These three payday loan alternatives only need verification of your income and cashflow – no credit needed.

Here, we’ll look at three alternatives to payday loans that can save you money and potentially help you build credit.

Best Payday Loan Alternatives

Payday Loan Alternatives Compared

Brand NameRewardsCredit CheckPrice
Petal Up to 1.5% cashback + bonus at certain retailersYes12.99% APR – 29.49% APR
IndigoNoneYes$0, $59, or $99 annual fee & 24.9% APR
Tomo1% cashbackNoNone


One good alternative is the unsecured credit cards offered by Petal.

To qualify for the card, you will need to meet some basic credit card requirements, some of which include being 18 years of age or older and residing within the U.S.

Instead of directly applying for the credit card you want, Petal first guides you through a pre-approval process.

Also Read: Second Chance Credit Card with No Security Deposit

You’ll enter your basic information, and Petal will perform a soft pull of your credit. If your credit score is low or you have no credit score at all, Petal will ask you for your bank account information. 

Using your spending and income history, Petal will assign you a Cash Score. They use this cash score in conjunction with your credit score to determine if you qualify for one of their cards and at what terms (APR, credit limit, etc.). 

Once you are pre-approved, you will be given a credit card offer or two and proceed with the application process. Just be aware that proceeding will require a hard pull of your credit and that pre-approval does not guarantee approval.

Also Read: Payday Loans Online, with No Credit Check, and Instant Approval

If you don’t meet the pre-approval qualifications, you will not be able to apply for one of their cards. While this could be disappointing, it does help you protect your credit from a hard inquiry. 

Each of the Petal cards, Petal 1 and 2, have slightly different interest rates and credit limits, but both allow you to earn cashback, and neither card will charge you an annual fee. 

Petal Card Comparisons

Source: Petal

Each month, Petal will report your balance, payment history, and other key account information to all three credit bureaus. This reporting could have a beneficial impact on your credit score. 

For instance, if you have a thin profile, the Petal card will help build it up. Or, if you have a high utilization rate, keeping your utilization low on your Petal card could improve your overall credit utilization. 

Try Petal


Another alternative on our list is the best resource if you otherwise can’t qualify for the Tomo card or one of the Petal cards. Particularly if you were rejected because of bank account issues (i.e., the balance in your bank account is too low). 

Also Read: I Need a Payday Loan Immediately

The Indigo credit card is a low-limit, unsecured card backed by Mastercard. 

Just like Petal, Mastercard will first guide you through a pre-approval process so that you don’t unnecessarily risk damage to your credit score (i.e., rejection with a hard inquiry). 

You may be asked to enter information about your income, but you will not be required to link your bank account as part of the application process. 

If you are pre-approved, you can move on with the application process and accept the hard pull of your credit. Pre-Approval does not guarantee final approval. 

If you don’t meet the pre-approval qualifications, Mastercard will use your information to determine if you might qualify for any of their other products. If you do qualify for other products, they will display these options as alternatives to the Indigo card.

The Indigo card itself comes with a maxed-out credit limit of $300. This credit limit cannot be increased. The card also comes with a 24.9% APR. 

Additionally, based on your creditworthiness, you may be required to pay an annual fee. The annual fee will be one of the following: 

  • $0
  • $59
  • $99

If you end up stuck with the $99 annual fee, you’ll get a discount for your first year and only pay $75.

Because of the low credit limit and potential annual fee, you’ll want to use this card as little as you can; otherwise, the utilization rate on the card could diminish your credit score. 

In addition to reporting your balance and credit limit, Indigo reports other key account information to the credit bureaus (i.e., payment history, opening date, etc.). Managed properly, this card can help you slowly improve your credit score.

Try Indigo


One alternative to consider, especially if your goal is to build credit, is the Tomo unsecured credit card. 

To get the Tomo card, you’ll need to meet the basic credit card requirements and link it to a U.S. checking account. 

This checking account is what Tomo uses to determine if you qualify for their credit card. They’ll evaluate your income and spending habits and then issue you a credit line of up to $10,000

Your credit limit could be as low as $100, but it can be increased by linking your account to your highest bank account balance, linking several bank accounts, and making on-time payments.

There is no credit check, so you can qualify even if you have bad credit or no credit at all. 

Once approved, you can use your Tomo card anywhere that Mastercard is accepted. And each time you swipe the card, you’ll earn 1% cashback that you can redeem as a statement credit or transfer directly into your checking account. 

The unique aspect of the Tomo card is making payments. Instead of receiving a monthly statement and then paying it, Tomo automatically drafts payment every Monday. So, as you swipe your card during the week, your balance is paid in full every Monday. 

This means that you can’t carry a balance beyond seven days. Not carrying a balance means that you can’t be charged interest. In fact, there are zero fees associated with the Tomo card. 

When it comes to reporting to the credit bureaus, the Tomo card reports just like a credit card. They report your balance, payment history, and credit line. 

Tomo does issue a statement every month, but this statement will only include your outstanding balance (purchases for the last week). This helps to keep your credit utilization low. 

Try Tomo

Why Should I Avoid Payday Loans?

Payday loans can provide a source for fast cash if your state allows them. Payday lending is actually banned in many U.S. states. 

But that access to emergency funds often comes at a high price. The fees associated with the loan start high. And, as the name suggests, you’ll need to pay this loan back by your next payday. 

If you can’t pay back the loan that quickly, well, then you can start adding interest rate charges to your already expensive loan.

The fees and interest charges will pile up every month, and you could end up paying back 2 or more times the original loan amount in fees. 

And if you end up taking out a second payday loan to pay for the first, you could find yourself stuck in the vicious cycle of payday loan debt like these unfortunate victims

There is no sugar coating it. Payday loans are predatory. 

They often send you further into debt and can heavily damage your credit score if you are late on a payment. 

By using any one of the alternative options we presented, you can get access to money in an emergency, often with no credit check and manageable fees (sometimes zero fees). 

And, as a bonus, all of these products, when managed responsibly, can help you build credit. The more you are able to build your credit, the more you will qualify for better products like high credit limit unsecured cards, and low-interest-rate debt consolidation loans. 

With decent credit, you’ll be able to go to traditional banks and avoid payday lenders entirely. 


When you have bad credit and an unexpected expense(s), resorting to payday loans, title loans, and other short-term loans can seem like your only option. 

But with the small loan amount, short loan term, and high-interest rate that the payday lenders offer, payday loans are not an attractive option. 

Pursuing payday loan alternatives like personal loans and credit cards that offer higher loan amounts and lower interest rates can be better for your wallet and your credit score. 

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