If you’re ever in a financial crunch and urgently need money to cover an unexpected expense, there are loan apps that can help.
Whether you call them cash advance apps, payday loan apps, or borrow-money apps, these platforms offer quick access to funds for those in a financial pinch.
While using these apps might provide a temporary solution, it’s important to keep in mind that borrowing money always comes with a cost.
This could be in the form of fees or even fostering bad financial habits. Nevertheless, loan apps can be a helpful tool in an emergency.
Here’s an in-depth look at how they work, their pros and cons, and our top recommendations for when you need money fast.
How Do Loan Apps Work?
Loan apps are typically designed as a quick fix for short-term financial needs. They are different from traditional online personal loans and are meant for fast cash access, often based on your future income.
“The growth in online lending apps has been significant,” says Michael Sullivan, a personal financial consultant at Take Charge America, a nonprofit credit counseling and debt management organization.
Generally, loan apps function like payday loans, where you get an advance on your next paycheck.
To use the app, you typically download it, link your external bank account (which should have direct deposit set up), and within minutes, sometimes a few hours, you can request a loan.
Most loan apps will charge a fee for borrowing the money, which could include a fee for each loan you take or a monthly subscription fee.
The repayment is usually due on your next payday, and many apps will automatically deduct the borrowed amount, plus any fees, from your bank account. Some apps may let you choose a repayment date.
7 Loan Apps to Help You Get Money Fast
With so many loan apps available today, it can be hard to choose the best one for your needs. Here’s a rundown of seven popular loan apps that can help you get cash when you’re in a bind:
1. Chime®: Best for Fee-Free Overdrafts
Chime® is a popular online banking app that offers a unique feature called SpotMe, which lets you overdraw your account by up to $200 when funds are low.
You don’t pay interest, and Chime® will automatically take back the amount you borrowed when your paycheck is deposited.
Chime® also allows you to access your paycheck up to two days earlier than the standard direct deposit time.
Cost: No fees for overdrafts. Optional fees for other services, such as fee-free withdrawals and certain account features.
2. Dave: Best for Larger Advances
Dave provides cash advances up to $500 through its ExtraCash feature, which can be transferred to your debit card instantly.
Not everyone will qualify for the highest limit right away, but you won’t incur any late fees regardless of how much you borrow.
Cost: A $1 monthly membership fee. Express transfers to an external account cost between $2.99 and $13.99.
3. Brigit: Best for No Late Fees
Brigit allows you to borrow up to $250 with an express delivery option for a small fee. If you opt for the slower delivery, you can get the money without any fees.
Additionally, Brigit allows you to extend your repayment date if needed, without penalties. It also offers a service to help you build your credit score.
Cost: $9.99 per month. Additional fees for express delivery.
4. Albert: Best for Variety of Financial Tools
Albert offers instant cash advances of up to $250, which you can receive for a small fee (or for free if you wait a couple of days).
The app provides several other financial tools like budgeting and investment features, making it a comprehensive financial management app.
Cost: The basic version is free, but the upgraded “Genius” plan costs $8 per month. There are small fees for instant cash advances.
5. EarnIn: Best for Multiple Advances
EarnIn allows you to access up to $750 per pay period, but only $100 per day. The app lets you choose when you want your cash advance, but fees apply for faster transfers.
Cost: Optional tip when you cash out. Fees apply for “Lightning Speed” transfers.
6. MoneyLion: Best for Deferred Payment Options
MoneyLion offers cash advances of up to $500, with no interest and no monthly subscription fee.
If you have the Credit Builder membership, which costs $19.99 per month, your borrowing limit increases to $700, and you may access up to $1,000 if you use direct deposit with the app. You can also request a deferred repayment for up to two weeks if needed.
Cost: A fee of $1.99 to $8.99 for fast delivery. Optional tips.
7. Possible Finance: Best for Longer Repayment Terms
Possible Finance offers loans of up to $500 with repayment terms that can stretch as far as 12 months. It’s a hybrid between a payday loan app and a personal loan, providing a grace period of up to 29 days for repayment.
Cost: The exact fees are not disclosed, but an example on the website shows a $250 loan costing an additional $44.12.
Alternative Ways to Get Money Fast
While loan apps can be convenient, they are not always the best solution. Here are some alternatives that could help you avoid the fees and interest associated with loan apps:
- 0% APR Credit Cards: If you have strong credit, you may qualify for a 0% APR credit card. These cards allow you to make purchases without paying interest for a specific period (usually 12 months or more).
- Ask Family or Friends: If it’s possible without affecting your relationships, consider asking family members or friends for a loan. This option can save you from paying fees or sharing sensitive bank information.
- Overdraft Protection: Many banks and credit unions offer overdraft protection services that allow you to access money beyond your account balance, often with no fees.
- Personal Loans: If you have good credit, a personal loan might offer more favorable terms than a cash advance app, with longer repayment periods and lower interest rates.
Bottom Line: Use Loan Apps Wisely
Loan apps can offer quick relief in emergency situations, but they should be used sparingly.
Even if you choose an app with low fees, you’ll still be taking a portion of your paycheck away when it’s time to repay. Ideally, you should treat cash advance apps as a last resort and try to build an emergency savings fund to cover unexpected costs in the future.
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