Say you’re a week away from this month’s paycheck, but your electric bill’s due in a few days. You’re probably going to borrow money from a family member to pay for it.
But, you might not know that there are other options that you can use, including payday advance apps.
If you don’t know what payday advance apps are, read on to learn more about them! We also have a few recommendations to help you out. You might want to consider these apps to help you keep up with your expenses.
What are Payday Advance Apps?
If you’re new to payday advance apps, you’re probably wondering what they are.
In simple words, payday advance apps are apps that let you borrow money from your paycheck. These apps enable you to deposit money into your checking account before your scheduled payday.
Through a payday advance app, you can receive a certain amount from your paycheck earlier than usual.
How Do They Work?
Like we’ve mentioned, payday advance apps let you receive an amount from your paycheck early. If you’re days away from payday, you can use a payday advance app and not wait for payday.
Depending on the app you use, you can get between $100 to $500. Once you get your paycheck, the money is paid directly to the app you used.
What’s great is that they don’t charge interest on these applications. However, a fee may be payable, or a tip may be requested.
To use payday advance apps, you’re going to need to connect the app to your bank account. The app determines how much you can withdraw from your paycheck using your account data.
Additionally, some of these apps can be applicable to your employer. In this case, you are eligible for a payday advance without the loan.
With a payday advance, the money will be deducted from your account on your next payday.
There are also payday advance apps that require a membership fee. These apps give you the option to withdraw small amounts and repay them when you can.
However, you can only borrow again once the amount has been repaid.
Lastly, keep in mind that just because there’s no interest doesn’t mean there’s no downside. Remember that you’re taking money out of your paycheck, which means you have less money once it arrives.
Pros and Cons of Payday Advance Apps
While payday apps are great to get quick cash, they might not be for everyone. With this, it’s time to discuss their pros and cons to help you decide on whether or not you should use these apps.
Pros of Payday Advance Apps
Here are the pros of using payday advance apps:
1. You can access cash fast.
Like we’ve mentioned, payday advance apps are beneficial to people who need fast cash. This is because these apps allow you to withdraw money from your paycheck, even without receiving it.
Also, since you need to connect a bank account to the app, you can receive the money almost instantly. Lastly, most apps can take as little as 5 minutes to apply for a payday advance.
2. Most apps don’t have an interest.
Unlike personal loans, most payday advance apps don’t charge interest. Like we’ve mentioned, most of these apps ask for a small fee or tip.
Additionally, if you apply for a payday loan, there’s a high chance that you pay up to 400% APR. Because of this, payday advance apps are more affordable, even when compared to credit card cash advances.
3. You can continue using the app after the approval process.
Another upside to using a payday advance app is that you can keep using it after the approval process. Although you have to apply and get approval, everything else will be easy once you get approved.
This makes payday apps more convenient than loans because the latter requires a reapplication every time you apply for a loan.
Cons of Payday Advance Apps
Here are the cons of using payday advance apps:
1. You need approval.
Like we’ve said, everything else is easy once you get approved. However, the approval process might be tedious.
These apps require that you undergo an approval process and connect your bank account. Also, some apps require that you go through your employer.
2. The amounts you can get are typically small.
In many instances, payday advance apps only enable you to receive $100 and $250 instantly. However, other apps can give you $500 immediately.
However, if you need money to cover larger expenses, these apps might not be for you.
3. You might get stuck.
While it might not be a problem for some, getting stuck in an ongoing cycle is still an issue.
Because payday advance apps are easily accessible, you might continuously withdraw money from your paycheck earlier than scheduled.
If you want to use payday advance apps, you must assess your situation.
Apps That Lend You Money
We’ve mentioned earlier that payday advance apps might not be for everyone. Depending on your needs and situation, using a payday advance app can be beneficial or harmful to you.
If you’re ready to start using payday advance apps, below are some of the apps we recommend. We’ll also be including some of each app’s vital information to help you with your decision.
1. Earnin
Earin is a popular payday advance app that’s been recently known as ActiveHours. It allows you to withdraw up to $500 with a limit of $100 a day. Earnin doesn’t charge any fees, but you can give them an optional tip (Earnin recommends 4%).
Requirements
- You’re required to pay via direct deposit
- You must have a checking account at an accredited bank
- You must have a job in a physical location or use an electronic time management system
Features
- Balance Shield: Earnin has a balance shield feature that protects you from bank overdraft charges. It also helps you keep track of your balance and gives you a $100 advance once it’s below $100.
Additionally, Earnin’s balance shield also alerts you once your balance falls below the amount you choose.
Cashback Rewards: If you use Earnin, you can earn cashback rewards. Earnin typically offers 1% to 10% cash back rewards when you run it as a credit card.
2. Empower
Empower is another payday advance app that you can use to get early pay. However, unlike Earnin, Empower only allows you to get up to $250 in cash advance.
Like most payday advance apps, Empower also doesn’t charge any interest or late fees.
Requirements
Empower uses various factors to determine whether you’re qualified for a cash advance or not. These are:
- Your bank account history and activity
- Recurring direct and average monthly deposits
Features
- Automatic Savings: Empower has an Automatic Savings feature that helps you track your income and expenses. This feature also allows you to transfer money to your AutoSave Account.
If your balance is high, the feature saves more money. On the other hand, it holds less if your expenses are large.
- Savings Tips: With Empower, you can determine the areas where you can save money. For example, it can break down your subscription expenses. This way, it’ll be easier for you to cancel those you don’t use.
Also, this feature helps you find better rates on your utility bills. Not only that, but it can also negotiate lower rates for you!
3. Brigit
Another payday advance app we recommend is Brigit. It’s one of the most flexible apps available, as it can give you $250 that you’ve earned in almost less than a minute.
Also, Brigit doesn’t require any credit check, so you don’t have to worry if your credit score’s on the bad side. Additionally, Brigit doesn’t charge you any fees and doesn’t ask for tips!
Requirements
Empower uses various factors to determine whether you’re qualified for a cash advance or not. These are:
- Your bank account history and activity
- Recurring direct and average monthly deposits
Aside from these, you also have to qualify through these requirements:
- Your income must be of a certain amount
- Your income must come from one stable source
- Your checking account must be at least two months old and have a balance greater than $0
- You must use your account to pay, receive money, and check your balance
Feature
- Brigit Score: Brigit uses a scoring system that serves as the members’ credit score. The app considers your earnings, spending habit, and banking behavior.
Depending on these factors, you can get a score from 1 to 100, with 100 as the highest. Keep in mind that you should have a score of at least 70 to earn cash advances.
4. MoneyLion
Like other apps we’ve mentioned, MoneyLion is also a fee-free payday advance app. With MoneyLion, you can get a cash advance at most $250.
Also, there are membership levels that you can enroll in to unlock several features.
Requirements
- You must have a MoneyLion checking account
- Your funds should be directly deposited into the account
Features
- Membership: MoneyLion has two membership levels: Core and Plus. With MoneyLion Core, you can get several offerings, including free credit monitoring and cashback rewards.
MoneyLion Plus offers the same, but you can access credit-builder loans with low interest.
Free Fraud Protection: The app sends you alerts when your account has suspicious uses. You can also lock and unlock your debit card through this feature.
5. Dave
Dave is the last payday advance app on the list. Dave has some similar features with Earnin.
This app is an online checking account that doesn’t require a minimum balance and doesn’t charge interest. It also offers you up to a $100 cash advance.
Requirements
- You must pay the monthly fee
Features
- Risk Notification: This payday advance app sends you a notification when you go over your balance. After that, it asks you if you want to withdraw up to $100 from your next paycheck.
- Accessibility: Dave offers fee-free access to many ATMs around the country. You can also use the app you freeze and unfreeze your card.
Also, there’s free electronic checking if you need it.
Alternatives to Cash Advance Apps
Now, if you think using a payday advance app is risky, you might be looking for alternatives. Of course, you can do a lot of things to get quick cash until your next payday.
If you need the money and fast, here are some things we suggest you consider doing.
1. Ask your friends or family
Of course, borrowing money from friends or family is a way to get money almost instantly. They might be willing to help you with your problem.
Also, the good thing is they don’t charge a fee or interest. Just keep in mind that you have to repay them.
2. Sell something
Another way to get quick cash is through selling something, especially things that you don’t use anymore. There are various platforms you can do this in, including a Facebook sales group.
3. Earn money through sharing economy
If the first two won’t work for you, you can still earn quick cash through sharing economy. You can drive for Uber or Lyft, then transfer your earnings into your account.
Using this method doesn’t cost you any fees too.
Tips to Break the Paycheck-to-Paycheck Cycle
If you’re living from paycheck-to-paycheck, you might be stuck in a cycle. Here are some helpful tips you can follow to break the paycheck-to-paycheck cycle.
- Ask yourself how much you need to earn.
- Examine your student loan payments.
- Pay your debts.
- Cut your expenses.
Final Words
Living in a paycheck-to-paycheck cycle is difficult. While these apps might help, they might also worsen your cycle and get you into a financial burden.
When using these apps, keep in mind to use them sparingly and consider your needs and situation every time.
Find this article helpful? Here are some more articles you can read to learn more about personal finances:
- How to Save Money FAST
- Choosing the Right Travel Insurance
- Top Tested Ways To Insure Against Stock Market Losses
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