If you are in urgent need of cash before payday, there are several options available to you through the convenience of your smartphone. These apps let you borrow small amounts from your next payday check before you receive it, making them good short-term solutions if you’re in a jam.
Many of these apps advertise that they don’t charge interest, but this does not mean they are not without a cost. It’s best to look at the fine print to find out how these apps charge you.
A popular cash advance app is the Dave app. This app lets you borrow a small advance while you wait for your next paycheck and can also help protect you from overdraft fees.
You can link your bank account to the app and they will notify you if an overdraft is on the horizon. They charge 0% interest on this advance and you can borrow up to $250 for certain members. It is not necessarily a free advance, however. They charge a $1 monthly subscription fee and there is the option that you can tip up to 20% of the advance. They also charge express delivery fees up to $6 depending on the loan amount, but you’ll get your cash in under 8 hours as opposed to the usual 3 days. The default repayment date is that of your next paycheck, but there is the option to change it.
The Earnin app is another popular lending app. It’s a paycheck advance app that works with your pay schedule to let you borrow money that you’ve already earned but have yet to be paid for. You link your checking account to the app as well as information about your employment, such as your timesheet.
New members start with a $100 cash advance max but can get up to $500 with consistent repayments in the app. The app withdraws the loan amount from your bank account on the date of your next paycheck. There are no fees or interest associated with getting your advance. Instead, the Earnin app asks for a voluntary tip of up to $14 per advance. They also offer an overdraft protection service for a $1.50 recurring tip.
There is also the Brigit app. Brigit is a budgeting app that offers instant cash advances up to $250 as well as other credit-monitoring and budgeting features. To use the cash advance feature, however, Brigit charges a $9.99 monthly subscription fee. The perk of this feature is that the app can get you your advance day-of or the next day depending on the time of your request. You’ll need a checking account with at least 60 days of activity, a positive balance, and a history of at least three direct deposits from your employer to qualify. The app withdraws the loan amount on a repayment date that they set according to your income schedule. You can earn 1 repayment extension for every 2 consecutive advances you pay back on the original repayment date, holding a maximum of three 3 extension credits at a time.
There are a few other apps that offer similar services and associated fees as those listed above, including Chime, MoneyLion, and Current. Look into the app that best serves your situation and budget needs.
So no, it is not necessarily free to get cash advances from lending apps. And using these apps consistently is not considered a healthy, sustainable financial habit. It’s always best to build up an emergency fund to cover yourself should a crisis arise. But these apps can provide fast cash in an emergency or protect from expensive overdraft fees, making them viable short-term solutions.
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