The best alternative to payday loans: a Paycheck Advance Apps overview
If you need to make ends meet before your next paycheck, fast cash options like payday loans or installment loans are not your only options.
Paycheck advance apps have been booming in the financial services industry in recent years, and the idea of an app that allows you to borrow money with low or no fees or credit checks is no longer something fancy. A cash advance app can be a good emergency solution for those who need some extra cash before their next paycheck. Below, we’ve covered the basic features of the popular same day paycheck cash advance apps.
How do the best paycheck advance apps work?
There are two types of cash advance apps. Direct-to-consumer paycheck apps allow users to get a cash advance, usually against an upcoming paycheck or direct deposit. The amount of the advance is automatically charged by the app in one lump sum when it’s due after your paycheck is deposited into your bank account. Popular direct-to-consumer apps include Earnin, Brigit, MoneyLion, and others.
Other types of payday advance apps work directly with your employer. Earned wage access apps require your employer’s consent before you can access wages already earned but not yet paid. Some of the examples are DailyPay, PayActiv, FlexWage, Branch, and Even.
Brigit is a slightly different, full-service personal finance app that offers a wide range of features, from budgeting and expense tracking to credit checking.
The Brigit app offers cash advances between $50 and $250 with no credit check or interest charges. However, to access cash advances and other features, you’ll need to pay a monthly fee and meet Brigit’s eligibility requirements.
While Brigit doesn’t check your credit, it does require that you have an active checking account. Brigit will review your account information and assign you a score based on your bank account health, spending behavior and earnings profile. You’ll need a score of at least 40 to qualify for a Brigit advance. Brigit will update your score as often as twice per day based on the information it receives from your bank.
Brigit will automatically deduct your payment based on your direct deposit schedule. If you’re not able to pay back the advance, you can request an extension credit no later than one business day before your advance is due.
Dave is one of the newest personal finance apps, known for its ExtraCash feature that allows you to get up to $500 in payday advances when you need them most.
Dave requires no credit check, but the process for getting a Dave advance is a bit more involved. You need to open a Dave checking account and an ExtraCash account, which is where the advance comes from. You can then open the Dave app and see if you qualify for a cash advance. Furthermore, you may have to answer some other questions to complete the withdrawal.
The amount you receive depends on several factors, including your monthly income, and can change as often as every day, so periodically check the current amount available to you.
Users may request a 30-day extension to the payback period, which is approved on a case-by-case basis. Do note that the extensions should be requested at least two days before the due date.
Klover is a mobile app that provides an advance of up to $200 based on your bank account activity. You can freely use these funds without worrying about hidden fees or high-interest rates commonly associated with other lending platforms.
Borrowing through Klover is relatively easy, but there are a few qualification requirements consumers must meet before signing up. To be eligible, the consumer must have an active bank account in good standing, a minimum of 3 consecutive direct deposits into the account from the same employer over the past 2 months, as well as a positive checking account balance.
The app offers a unique points program where users can earn rewards and increase their cash advance limit.
Chime isn’t quite a paycheck advance app, but it lets you get the money you’ve earned sooner. If you have a Chime account with direct deposit, your wages become available to you as soon as your employer deposits them into the account. This allows you to access your money two days sooner, as typically the bank holds money for between three and five business days.
Chime offers paycheck advances through SpotMe. SpotMe is a totally free service for eligible Chime members that allows you to get up to $200 for purchases and cash withdrawals with no overdraft fees. The next time money is deposited into your checking account, it will be automatically applied to your negative balance.
In addition, with a Chime bank account, you can transfer money, send, and deposit checks, and pay bills online. The Chime account also offers a number of other great features that most other bank accounts don’t have, such as no minimum balance fees, monthly service fees, foreign transaction fees, or overdraft fees of up to $200. It also offers fee-free access to more than 60,000 ATMs nationwide, banking alerts and notifications, a savings account, and a secured credit card.
As you can see, the above apps offer unique benefits to their users. Some of them provide a higher cash advance limit, others have more flexible repayment terms and do not charge monthly fees. Be sure to consider these aspects before choosing the right cash advance app for you.
In case the $100–$500 limits are insufficient to cover all your expenses, you might want to consider getting a personal loan. Personal loans have low interest rates and are easy to pay back. The amount you want to borrow can also be negotiated with the lender.
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