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M8 and 5/16 bolts are extremely similar, but 6/32 screws are closest to M3.5. In the US they are the same price as M3 and M4 and just as available. Some parts of the world it just does seem to workout that way but does in others.

Either will work, use M4's where they will fit and M3's when you have too. The M3 are strong enough but just have a very small surface area, washer might work but are a hassle as well.

Sorry