Cash advance apps

Banking

Cash advance apps

What are cash advance apps?

Cash advance apps, sometimes called payday loan apps, are mobile applications that allow users to access short-term loans or advances on their paycheck. These apps provide a way for people to get cash when they need it, often without the need for a credit check or collateral, though they generally do not, for example, help you build credit over time. Many of these types of loans are not issued through banks.

To use a cash advance app, users typically need to connect their bank account and provide information about their income and employment. The app then uses this information to determine how much the user can borrow and offers the loan or advance.

Some cash advance apps charge fees or interest on the loans, while others may offer interest-free loans or charge only a small fee. Many cash advance apps also provide additional financial services, such as budgeting tools, credit monitoring, or investment options.

It's important to carefully read the terms and conditions of any cash advance app and consider alternative options before taking out a loan or advance. While these apps can be a convenient way to access cash when needed, it’s important to understand how they work and how much they cost in total.

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What are 5 cash advance apps?

Here are five popular cash advance apps:

‍Earnin - This app allows users to access their paychecks early. Users can withdraw up to $100 per day and pay what they think is fair for the service.‍
Brigit - Brigit offers cash advances of small amounts of money. The app also provides budgeting tools to help users manage their finances.‍
Dave - Dave offers cash advances of up to small amounts of money too. The app also provides budgeting tools and alerts users when their bank account is in danger of being overdrawn.‍
MoneyLion - MoneyLion offers a range of cash advances. The app also provides a range of financial tools and services, including credit monitoring and investment options.‍
Branch - Branch offers cash advances based on your wages. The app also provides budgeting tools and allows users to earn cashback on purchases made with their debit card.

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What are the pros and cons of cash advance apps?

Cash advance apps can be a convenient way to access short-term loans or advances on your paycheck when you need cash fast. However, like any financial product, they come with both pros and cons that you should consider before using them.

Pros:

Convenient: Cash advance apps are available on your mobile phone, making them easy to use and access when you need them.
Quick: Many cash advance apps offer instant approval and deposit the funds into your bank account within minutes, providing a fast solution to your financial needs.
No credit check: Unlike many traditional loans, cash advance apps may not require a credit check, making them accessible to people with lower credit scores.
Low fees: Some cash advance apps offer low fees or no fees for borrowing, making them a more affordable option than traditional payday loans.

Cons:

High-interest rates or fees: Some cash advance apps charge high-interest rates, making them a costly option if.
Risk of debt: Since cash advance apps are easy to access, it can be tempting to borrow more than you can afford to repay, leading to a cycle of debt.
Limited borrowing amounts: Cash advance apps typically offer small loans or advances, so they may not be suitable for larger expenses.
Credit building: generally, cash advances, and by extension cash advance apps, can affect your credit score like any other loan. It's important to read the terms and conditions and ensure you pay on-time as payment history impacts your score. [1]

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What are alternatives to cash advance apps?

If you're in need of money, there are several alternatives to cash advance apps that you can consider:

‍Personal loans: Personal loans are a type of traditional loan that can be used for any purpose, including covering unexpected expenses. Personal loans generally have lower interest rates and fees than cash advance apps, but they may require a credit check and take longer to obtain.‍
Credit cards: If you have a credit card, you may be able to make a purchase or withdraw cash from an ATM. While cash advances on credit cards can be costly, they may still be a more affordable option than cash advance apps.‍
Friends and family: If you need a small amount of cash, consider asking friends or family for a loan. While this can be an uncomfortable conversation, it may be a more affordable and flexible option than using a cash advance app.‍
Side jobs: Consider taking on a side job or selling items you no longer need to earn extra cash. This can be a more sustainable way to improve your financial situation than relying on short-term loans.‍
Non-profit credit counseling agencies: Non-profit credit counseling agencies can provide free or low-cost financial advice and assistance, including help with creating a budget, negotiating with creditors, and finding alternative sources of funding

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The Yendo Card

Yendo is the first credit card that's backed by the value of your car. The card can provide access to credit for those who might not be able to qualify for other credit cards. It's a real credit card, powered by Mastercard, that provides credit limits from $450 - $10,000, depending on the value of your car. So, rather than re-applying for loans, for example, you can access funds an ongoing basis and, with responsible usage like on-time payments, build your credit too.

Features & benefits

‍Credit limit - access up to $10k in credit‍
App - the Yendo app lets you manage your account, wherever you are‍
Virtual card - access a portion of your credit limit prior to getting your physical card in the mail with the Yendo virtual card. Use your virtual card in addition to your physical card‍
Cash advances - ability to do cash advances on your card if you need to access money quickly‍
Access to revolving credit – you’ll have a revolving line of credit that opens up as you make payments‍
Credit reporting – all your account activity will be reported to the credit bureaus, giving you the perfect opportunity to build your credit

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Additional information

Links

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Citations

[1] https://www.myfico.com/credit-education/whats-in-your-credit-score

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Cash advance apps