Unexpected expenses can cause major disruption to plans when you live paycheck to paycheck. These financial disruptions can be solved by cash advance apps.
Bankrate’s survey revealed that more than half of respondents would not be able to pay for a $1,000 unexpected expense. Without an emergency fund, financial stress could be caused by a failure of transmission or burst pipe.
Borrowing money is a common way to pay for expenses until your next paycheck. You repay it with your next paycheck. Both cash advance apps and payday loans allow you to borrow money before your next payday. Lenders charge high annual percentage rates (APRs), to borrow money with a payday loan. High fees can cause more financial problems in the long-term, as they can accumulate into higher debt.
1. Earnin – The best for hourly workers
Earnin allows you to quickly borrow against your next paycheck without fees or interest.
Earnin connects users’ bank accounts to verify that they are paying their bills when they sign up for the app. The app tracks how long users are at work by using their phone’s GPS and allows them to submit timesheets. The app then calculates an hourly rate based upon how much money is received in direct deposit.
Earnin lets you withdraw wages that have not been paid by your employer yet. Earnin debits your account automatically for the amount borrowed when the next paycheck arrives in your bank account.
Users can withdraw $100 per pay period initially. After establishing a record of app usage and repayment, the maximum amount that can be withdrawn per pay period is $500.
The service is free of charge. Earnin app earns money by accepting tips from its users.
- Tips: Costs are voluntary
- Maximum Advance: $100 to $500
2. Dave – Dave is the best for overdraft protection
Dave can help if you are concerned about overdraft fees affecting your budget. Dave’s app detects potential overdrafts (e.g. a bill coming up) and warns users before they are too high. You can also access a summary of Yours to spend, which is a personal budget that takes in income and past expenses. This allows users to determine how much they can spend.
Dave will lend you a small advance if you don’t have enough funds to cover an upcoming expense. The maximum amount you can borrow is determined by how much you are able to repay on your next paycheck. The interest-free advance is due back as soon as the next paycheck arrives.
Dave can also help users find side hustles in the gig economy. Side hustles are jobs that are done in addition to your main job. They may offer more flexibility and higher pay. Side hustles can provide supplemental income between paychecks and help you avoid taking out any short-term loans.
Dave membership is $1 per month. However, users can send a tip to show their support. Dave offers a spending account that users can sign up for. This allows you to have your paychecks deposit into your account up until two days before they are due.
- Costs: $1 per month, plus tips
- Maximum advance: $250
3. Brigit – The Best Features
Brigit, another app that assists with budget management, offers cash advances to stretch your funds between paychecks and is also available.
Brigit must connect to a user’s checking account with at least 60 days of active history to be eligible for an advance. The checking account must also have a positive balance, and record of at least three payroll deposits. The app will use your spending history and bank account assessments to determine if you are eligible for instant cash. Up to $250 cash advances may be available for users. Brigit then determines the due date for repayment.
Brigit users who are eligible for instant cash can also turn on an automated transfer feature which sends an advance to their bank account whenever they are at risk of overdraft. Brigit, just like the Dave app can help you to find side hustles to make extra income whenever you need it.
Basic membership to Brigit costs nothing, but it does not include cash advances. Upgrade to Brigit Plus at $9.99 per month to get access to these additional features. This includes a credit builder and identity theft protection, as well as repayment extensions that allow users the ability to reschedule due dates.
- Access to the cash advance feature costs $9.99 per month
- Maximum advance: $250
4. Current – Best for Spending
Current is a mobile-only checking account that can be accessed only via a mobile app. The app’s purpose is to reduce fees and help users budget more effectively.
Current offers a free account. However, to have access to all features including overdraft coverage and direct deposits, you will need to pay $4.99 per month for a Premium account. Direct deposits can be transferred to your account as fast as two days. Overdrafts are covered without a fee. New account holders have the option to receive up to $25 in overdrafts, and you can increase that limit to $200 with time. Current instantly releases any pre-authorized hold placed on your account by variable purchases, such as gasoline stations. These holds can last up to 10 business days. Current releases the hold and sends the funds back into your account.
Current offered a $50 bonus to new Premium members at the time that this article was updated.
- Premium: Prices from $4.99 per month
- Maximum advance: $25-$200 in overdraft protection
5. MoneyLion – Best for people who receive direct deposits
MoneyLion, another option, offers users interest-free cash loans as well as expedited direct deposits. This allows them to cover unexpected expenses between paydays.
Instacash provides cash advances at no interest to cover unexpected expenses for users who have recurring direct deposits. Cash advances up to $25 are available in the beginning, but eligible users could be eligible for up to $250.
MoneyLion accounts do not require fees. For expediting Instacash transfers, users may be charged an additional fee.
MoneyLion offers an online RoarMoney account. That’s way MoneyLion app allows you to receive direct deposits faster and access cash advances in large amounts. RoarMoney accounts are subject to a $1 monthly charge.
- To unlock the largest cash advance amounts, it costs $1 per month
- Maximum advance $25-250
Bottom line
For low-income people, the gap between paydays can be a significant obstacle. Although cash advance apps can be used to help with emergency expenses, it is best to combine them with emergency fund savings. This will allow you to get short-term assistance from the app, as well as better savings habits.
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