Best Loans Apps Of May 2024 – Forbes Advisor

Best Loan Apps For Cash Advances and Overdraft Protection

BEST OVERALL LOAN APP FOR CASH ADVANCES

EarnIn

Editor’s Take

Earnin is an instant cash advance app that lets users get paid as soon as they leave work by connecting the app to a bank account and tracking work hours. After working enough hours, users can request a cash advance of $100 to $750 per pay period using the platform’s Cash Out tool. App users can opt into Lightning Speed for $1.99 to $3.99 and receive cash instantly or within minutes.

There are no fees associated with Earnin, but there is a tip feature with options ranging from $0 to $14 for most services. The platform also sends users alerts if their bank account falls below a set balance and can send automatic Cash Outs on an as-needed basis.

Earnin is only available in the U.S. and U.S. territories.

Pros & Cons

• No mandatory fees
• No credit check required
• Same-day funding available

• Low borrowing limits
• Seemingly low tips can translate into high APRs
• Requires sharing personal banking information

Details

Repayment: Borrowed funds are withdrawn from the user’s bank account on payday.

Turnaround time: One to three business days or within minutes for users with Lightning Speed.

BEST FOR ALL-IN-ONE BANKING

Chime®

Editor’s Take

Chime is a mobile banking app that offers a Secured credit card, savings account, and checking account with SpotMe®*. With SpotMe, Chime allows you to overdraft on debit card purchases and cash withdrawals, up to $200, without charging a fee. Users have the option of leaving a tip, but this isn’t required and failure to leave a tip doesn’t impact app functionality.

Pros & Cons

• Fee-free overdraft up to $200 for eligible members
• Tipping is optional
• Banking tools are user-friendly

• Must have Chime account with at least $200 monthly direct deposits
• Only functions as overdraft protection
• Must have Chime Checking Account with at least $200 monthly direct deposit

Details

Repayment: Borrowed funds are withdrawn from the user’s bank account on payday.

APR example: If you overdraw $50 on your account and repay the balance in five days with a $1 tip, you essentially pay a 146% APR.

Turnaround time: Funds are disbursed instantly when your Chime Checking Account is overdrawn.

BEST FOR CHECKING AND SPENDING

Current

Editor’s Take

Current is a financial technology company that offers app-based checking and Savings Pods. Though not technically a cash advance app, Current offers Overdrive protection for customers who overdraw on their accounts.

Current customers who receive at least $500 in eligible, monthly direct deposits start with a $25 fee-free overdraft limit that can be increased to $200 over time.

Pros & Cons

• No monthly fees
• No overdraft fees
• Overdraft protection up to $200

• Must sign up for a Current account
• Requires minimum monthly direct deposits
• Not a true cash advance

Details

Repayment: Borrowed funds are withdrawn from the user’s bank account on payday or at time of next deposit.

APR example: No fees or tips included.

Turnaround time: Funds are instantly disbursed when Current account is overdrawn.

BEST FOR MULTIPLE BORROWING OPTIONS

MoneyLion

Editor’s Take

In addition to Instacash cash advances up to $500, MoneyLion offers credit-builder loans, mobile banking accounts and investment accounts. Members get access to their credit score, tips on how to improve that credit score and other helpful tools. As with other top loan apps, MoneyLion doesn’t charge any fees and tipping is optional.

Pros & Cons

• Offers cash advances up to $500
• No monthly fee and tipping is optional
• No credit check required

• Funding can take up to five business days
• Instant delivery requires a Turbo Fee
• Requires bank account access

Details

Repayment: Borrowed funds are withdrawn from the user’s bank account on payday or at time of next deposit.

APR example: If MoneyLion instantly deposits a $50 advance into an external account for $4.99, you pay an additional $1 tip and repay the loan in five days, it costs $5.99 and the APR translates to about 875%.

Turnaround time: Instant funding available with Turbo Fees or 24 to 48 hours for MoneyLion checking account users; two to five business days for nonmembers.

BEST FOR BUDGETING HELP

Brigit

Editor’s Take

Unlike other apps, Brigit provides free access to financial experts who can help users create a budget and track spending. However, users who want to access the app’s cash advance function must pay $8.99 per month, which adds up to around $120 per year. Cash advances are available between $50 and $250 with instant funding speeds for eligible members.

Brigit also helps app users find gig work, and Plus members get $1 million in identity theft insurance, automatic advances to prevent account overdraft and access to credit builder tools.

Pros & Cons

• No credit check required, but eligibility requirements apply
• Access to financial experts and budgeting tools
• No interest or tip fees

• Cash advance costs $8.99 per month
• Withdrawals limited to $250

Details

Repayment: Varies depending on when you request the advance.

APR example: No interest, but fees cost around $120 per year.

Turnaround time: Same-day funding available for requests made before 10 a.m. ET.

BEST FOR OVERDRAFT PROTECTION

Dave

Editor’s Take

Users can get cash advances up to $500 and the company reviews available funds before debiting the repayment amount. This prevents banking overdraft fees and adds to the overall value of the service. Dave also offers users Dave Spending accounts, which feature no overdraft or low-balance fees.

The platform charges a $1 monthly fee, but tips are optional and can be as much as 20% of the advance. Users can pay $1.99 to $5.99 per transaction to receive funds within eight hours instead of several days.

Pros & Cons

• Advances start at just $5
• Includes automatic overdraft protection
• May be cheaper than a bank’s overdraft fee

• $1 monthly fee
• Funding speeds are slower than for some apps
• Website is less transparent than some providers

Details

Repayment: Automatically set to the user’s next payday, but this is adjustable.

APR example: Borrowing $100 five days before your next paycheck, with a $3.99 express fee, $1 monthly subscription fee and a $1 tip, will cost $5.99, which equates to an APR of about 437%.

Turnaround time: Up to three days or within eight hours for users who pay the express fee.

Summary: Best Money Borrowing Apps of 2024

Note: The APR calculations in this post are based on omnicalculator.com.

Methodology

We reviewed nine popular lenders based on eight data points in the categories of loan details, loan costs, perks, customer experience and funding speed. We chose the best lenders based on the weighting assigned to each category:

• Loan cost: 40%
• Loan details: 20%
• Funding speed: 20%
• Customer experience: 10%
• Perks: 5%

Within each major category, we also considered several characteristics, including maximum loan amounts, repayment terms, and applicable fees. We also evaluated each provider’s customer support, borrower perks and reviews.

Tips for Comparing the Best Cash Advance Apps

Money loaning apps and cash advance apps offer fast funding times with minimal fees. Some even provide additional financial management resources like checking accounts, automatic overdraft protection and budgeting tools. If you need a little extra cash to tide you over until payday, these apps could help. But with so many options available, it can be tough to know which app best meets your needs.

Follow these tips when comparing the best cash advance apps:

• Consider the fees. Some cash advance apps charge higher fees than others, so compare the monthly fees and tips charged by each option before deciding which to use. Then, compare the cost of using a cash advance app to the overdraft fees charged by your bank to calculate savings.
• Calculate interest rates. Many apps charge tips or monthly membership fees that can add up quickly. While cash advance app fees don’t always show up as interest rates, they can equate to high APRs.
• Look at the repayment terms. Most cash advance apps automatically deduct payments when a user’s paycheck hits their bank account. Don’t use a loan app if you’re unable to meet the repayment requirements based on your current income.
• Read the reviews. Before choosing a cash advance app, read online reviews to get a better sense of which apps are best for your needs.
• Ask around. If you know someone who has used a cash advance app, ask them for recommendations. This can give you first-hand insight into how an app works and whether it’s a good fit.

What Is a Cash Advance App?

A cash advance app is a type of mobile application that allows users to borrow money against their next paycheck. These loans typically come with high fees and interest rates, but they can help consumers access cash quickly or avoid their bank’s overdraft fees.

Related: 10 Ways To Get Cash Now

How Do Cash Advance Apps Work?

Cash advance apps typically work by allowing users to borrow money against their next paycheck. Some apps track work hours while others rely on monthly direct deposit history. In general, though, these apps require users to connect their personal bank account with the platform to allow for automatic payments and withdrawals.

On the other hand, some cash advance apps are actually mobile banks that offer overdraft protection for account holders. In this case, the app helps users avoid overdraft fees by automatically depositing money if an overdraft is detected. The money is then withdrawn from the user’s account when their next paycheck is deposited.

Notably, cash advance apps should only be used sparingly to borrow cash against future paychecks. Even tip-based apps can come with high APRs that can lead to a cycle of borrowing that only serves as a temporary fix.

Pros and Cons of Cash Advance Apps

Cash advance apps can help consumers avoid overdraft fees and cover minor, unexpected expenses—but they’re just a bandaid, not a long term solution. Because of this, loan apps come with a number of advantages and disadvantages that should be considered before agreeing to the terms of use.

Pros of Cash Advance Apps

• Provide fast access to cash in an emergency
• May be cheaper than paying an overdraft fee to your bank
• Often accessible to borrowers with bad credit
• May offer additional features like mobile banking or investment accounts

Cons of Cash Advance Apps

• Fees and tips can equate to high interest rates
• Can still lead to an overdraft fee if funds aren’t available when repayment is due
• May result in a cycle of high-interest borrowing and substantial fees with repeated use
• Not a permanent solution to ongoing cash shortages

When To Use a Cash Advance App

Using a cash advance app may make sense if you need fast cash to cover an emergency expense, such as an unexpected car repair or medical bill. It’s often a more affordable option than a payday loan, but you could still end up with overdraft fees if you don’t have enough in your bank account to repay the funds. 

While a cash advance app can be helpful, it isn’t a good solution for covering everyday expenses or other ongoing costs since the fees can quickly add up. 

Alternatives to Loan Apps

Cash advance apps can provide fast access to cash when you need it, but they usually come with high fees and interest rates, which can make them expensive in the long run. Consider these cash advance alternatives first:

Small Personal Loans

In contrast to cash advances, small personal loan amounts start around $1,000 to $2,000 and don’t require repayment as quickly. Instead, terms are often available for 24 months or more, and APRs start around 4% for borrowers with good credit.

Related: Best Small Personal Loans

Credit Union Loans

Credit union personal loans offer a lower-cost alternative to cash advances but with lower borrowing amounts—usually around $250 or more. Credit unions are nonprofit organizations, so they typically offer lower rates and terms that are more favorable to borrowers. But keep in mind you’ll need to become a member of the credit union to take out a loan.

Family Loans

If it’s an option, a family loan may be a good alternative to a cash advance. This is just a loan you borrow from a family member or trusted friend. The interest rate will likely be lower and you’ll have more flexibility around repayment terms. That said, you should create a repayment plan so you don’t put a strain on your relationship.

Buy Now Pay Later Apps

Buy now, pay later (BNPL) apps let you finance purchases over a set period of time. Some BNPL apps don’t charge any interest if you pay off your purchase within the term, whereas others charge interest for longer repayment terms. With a BNPL service, you can immediately purchase an item and pay it off in weekly, bi-weekly or monthly installments. Aside from interest, you might have to pay fees for using BNPL if you miss payments. 

Other Ways To Get Money Fast

There are also lots of other ways to get money fast besides taking on debt, including:

• Borrow money from family and friends. While borrowing money from friends and family may be more informal, it’s still recommended to draw up a promissory note to ensure there are clear terms and conditions in place.
• Call 211 or visit 211.org. This service, operated by the United Way, anonymously connects you with someone in your community that can point you toward local services and support.
• Start a side hustle. Some side hustles, like transcribing audio files online, participating in focus groups or filling out surveys, don’t pay a whole lot, but they’re quick and easy to start.
• Ask for more hours. If you’re an hourly employee and your employer has more hours available, ask if you can take on a few extra shifts.
• Get a temporary part-time job. Part-time work can help your cash flow, even if it’s just for a few weeks or months.
• Sell things you’re not using. Post your old DVDs or unused hobby equipment on Craigslist or Facebook Marketplace to earn a few quick bucks.
• Ask for an extension or payment assistance on your bills. Call your utility providers, landlord/mortgage servicer, loan servicers and anyone else you owe money to each month and ask for support. They won’t always grant it, but it doesn’t hurt to ask.

Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC.

^There’s no fee for the Chime Savings Account. Cash withdrawal and Third-party fees may apply to Chime Checking Accounts. You must have a Chime Checking Account to open a Chime Savings Account.

*Chime SpotMe is an optional, no fee service that requires a single deposit of $200 or more in qualifying direct deposits to the Chime Checking Account each month. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases and cash withdrawals initially, but may be later eligible for a higher limit of up to $200 or more based on member’s Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your limit. Your limit may change at any time, at Chime’s discretion. Although there are no overdraft fees, there may be out-of-network or third party fees associated with ATM transactions. SpotMe won’t cover non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. See Terms and Conditions. Tipping or not tipping has no impact on your eligibility for SpotMe.

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