Last Updated 02.11.2022
Living from one payday to another paycheck and having fewer savings can be fun until an unannounced expense hits you. An emergency medical bill or a water pipe bursting in your bathroom can cause such unexpected expenses at once. Unexpected expenditures are hectic and require quick cash, which may not always be available. It is where cash advance apps come in handy. These apps provide a momentary solution to such abrupt financial problems. One common way to pay such bills is by taking a payday loan.
How Do Payday Advance Apps Work?
Payday loan apps work slightly differently from other loan options like personal loans or credit cards. Whereas in credit cards or personal loans, you have to pay interest rates here that interest is negated, and instead, they charge you subscription money. They may charge this or suggest you give them some reward money.
Payday advance apps are a new development in this field and help provide you with fast cash before you reach your next payday. These payday advance apps get money out of membership fees or tips provided by members rather than simple interest. Unlike other payday loan lenders, they charge lower payments to benefit the user. With the pandemic and stagnant wages, these apps are a hot topic nowadays.
Let us discuss below some of the best apps available in this field.
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Earnin is the first app that comes to mind while thinking about low fees. It is a payday loan app that gives you money before receiving your paycheck. Earnin connects with an individual’s bank account to confirm the payment. The app computes the users’ working hours through a submitted timetable or through automatic GPS tracking. It does so to calculate the wage or salary of the customer.
This site will allow you to borrow the money your employer has not provided you yet. Earnin will automatically deduct the borrowed amount from your account as soon as your next paycheck enters your account.
Amount: $100 – $500
You can borrow a maximum of $100 per pay period for first-time users. Later on, after establishing a history of usage and repayment in the app, you can borrow up to $500.
- Fees: As mentioned earlier, Earnin does not charge an interest rate on your borrowings. Instead, it gathers voluntary tips of a maximum of $14. You can also go for the feature of overdraft protection by setting automatic voluntary reward money of at least $1.50.
- Speed: Earnin has a feature called Lightning Speed. With this feature, you can get your money instantly, which otherwise takes 3 business days typically. Surely a waterpipe outburst cannot wait for 3 days, so this feature comes in handy for such speedy emergencies. This feature costs around $1.99 to $3.99 according to your borrowed amount.
- Repayment: When you first enter your bank details, Earnin will keep them. After you get your next paycheck, they will automatically deduct the borrowed balance from your account, leaving you extra work.
- APR example: Suppose you borrow $100 seven days before your payday and a tip of $2, then your loan’s APR will be 104.3%.
Brigit comes second in our list of payday loan apps with the best possible features. It helps manage your budget and offers loans to let users have enough funds between paychecks. In the beginning, Brigit will need to link to an individual’s account, which must have at least two months of working history.
- Amount: $50 – $250
Brigit is a cash advance and budgeting app that lends its users money up to $250 whenever needed. Brigit’s free plan can give you advice regarding financial matters and help in budgeting. Subscribing to such programs can benefit you greatly as you get numerous helpful features for users. But to get cash advances and other features, you need to pay for their subscription and get them along with the features included in the free plan.
- Fees: As we had mentioned earlier, Brigit, too, does not charge an interest rate on your borrowings. Instead, it gathers the subscription money, $9.99 every month. Although the basic membership is free, it does not include all the best features it gives. Several reviews from different platforms show that the paid plan is the best method to get the ultimate good of the app.
- Speed: Brigit is said to have a tremendous rate. They even say that, if requested before10 am, they can even pay you the money on the same day. Otherwise, the payment will be made on the next business day.
- Repayment: Like Earnin, Brigit also has an automatic method of setting your next payment based on your payment receiving schedule. You can edit your repayment date in the application.
- APR: Suppose you take a loan of $100, which you repay within seven days along with subscription money of $9.99, then you get a loan with APR over 500%.
Chime is a payday app with a feature called Chime’s Checking Account. Using this application, users can get directly deposited money two days before their payday. With an alert system, the app sends notifications for new transactions to help users track their expenses. If the user somehow misplaces their debit card or notices suspicious transactions, they can immediately deactivate their card from the app.
You can use the services of Chime for free since it earns from fees charged to merchants for each debit-card transaction. Chime says you need at least $200 to qualify for direct deposits to your Chime account.
- Amount: $20 – $200. Chime has a unique feature called SpotMe which is more of an overdraft protection feature than a cash advance, but it still asks if you want to give a tip for their services. Chime says you need to have at least $200 to qualify for direct deposits to your Chime account every month to qualify for SpotMe. The limit starts at $20 and increases based on your account activity.
- Fees: Like the other services, Chime does not require fees; instead, it asks for voluntary tips.
- Speed: You can get cash instantly after creating your SpotMe account.
- Repayment: The next time you get a direct deposit from your job, that is the next paycheck, the amount Chime spotted you will be repaid automatically.
- APR example: Suppose you take a $50 as overdraw from Chime and repay the loan money in seven days, along with a tip of $1. You then get a loan of $50 with an APR of 104.3%
Known best for overdraft protection, Dave can help you if overdraft fees are cut into your budget. This paycheck advance app looks for potential overdrafts, like an upcoming electric bill or school fees, and alerts customers before their account is overdrawn. In addition, they have a unique personalized budget calculating feature called Yours to Spend summary, which factors in income and past expenses to estimate how much customers can spend freely.
Another good aspect of using Dave is that they can guide users to find a side hustle in the gig economy. A side hustle is a job with flexible hours that will be an addition to your main job and let you earn extra money. It can help customers eliminate the need to constantly borrow money every time there is an emergency by providing supplemental income between paychecks.
- Amount: $5 – $200 for spending account users of Dave. $5 – $100 for customers not having a Dave spending account.
- Dave also has a spending account for users that allows paychecks to be deposited into your account two days earlier than your payday.
- Fees: Dave has a few options for taking payments, but they are all optional, as said by the company.
- From the app, you can opt-out of a monthly membership fee that costs $1.
- To get money faster than usual customers, you can pay a charge of $1.99 to $5.99. this amount shall vary according to your loan amount.
- There is another optional tip up to 20% based on the amount borrowed.
- Speed: Typically, it takes three days for the funds to reach your bank account. However, if you pay the express fee ($1.99 to $5.99 according to your loan amount) to get your money faster, the company guarantees to fund you within eight hours.
- Repayment: By default, your payment date is set to your next payday when you get your paycheck, which you can change according to your wish.
- APR samples: For example, suppose you borrow $100 a week before your job pays you and pay a 5.99% express fee, a $1 subscription fee, and a $1 additional tip. It will cost you a total of $7.99 to borrow $100. Then the APR on this loan amount would be above 400%.
MoneyLion is a payday loan app that gives out cash loans without charging any interest to help customers cover expenses between paydays. The MoneyLion app offers many things in one – mobile banking and investment accounts, financial tracking, an option of credit-builder loan, and cash advances up to $250.
- Amount: $25 – $250. MoneyLion has a feature called InstaCash services which gives out cash advances free from interest money to help customers cover unexpected and emergency expenses with recurring deposits. But only this app’s checking account users can withdraw the maximum loan amount, whereas new customers can avail of lower amounts only.
- Fees: MoneyLion too has a voluntary tip service with an additional charge for instant money delivery that varies according to your loan amount.
- $0.99 – $5.99 for MoneyLion checking account users to get instant money.
- $1.99 – $7.99 for users with non-MoneyLion checking accounts to get instant money delivery.
- Speed: In case you take the instant money option, it typically takes half a day or even a whole day for the money to be credited to MoneyLion checking account users.
- For non-MoneyLion checking account users, it usually takes around 3 to 5 business days for the money to get deposited.
- Repayment: The money will automatically be withdrawn from your bank account during your next paycheck day. If your balance sheet still lacks a sufficient amount, then MoneyLion will keep trying to extract the funds.
- APR example: If you take a loan of $100 and get it deposited instantly for $7.99, add a tip on top of it for $1 and pay back the money within seven days. Then you will be charged with an APR of over 300%.
Advantages and Disadvantages of Using a Cash Advance App
Although it may seem okay to use these apps with low subscription money and fast payments, however, there are certain risks involved that you should consider before borrowing money from this list of cash advance apps.
Pros of Using Payday Loan Apps
- Users can conveniently get hold of funds during an emergency before getting their paycheck.
- Unlike other payday loan agencies, these apps provide cash beneath their prices.
- These apps come with friendly features for budgeting your money, like Chime and Dave.
- Using these almost free instant cash advance apps, you can avoid insolvency by financing your account before it is overdrawn.
Cons of Using Payday Advance Apps
- Huge payday loans can sometimes usher you into debt traps if the user cannot pay them back after getting their next paycheck.
- These apps can stimulate you towards bad habits of spending excess money since the loan funds do not always need to pay in emergencies only.
- Although lower than the cost of payday loans, some apps need fees.
- Joining any of these best cash advance apps means sharing your financial data. However much they assure you of safety, your data can get jeopardized at any moment.
Payday loan apps are good for use during extreme emergencies when you cannot get hold of the fund from anywhere else. However, always keep in mind the risks and work accordingly. Try out the apps from our list of best cash advance apps and benefit from them.