What Happens If You Can’t Repay a Cash Advance? Costs, Consequences, and How to Stop Automatic Repayments

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Mitchel Harad

Cash advance apps like Dave, Earnin, and Brigit have become a lifeline for millions of people who need quick access to cash. Whether it’s to cover an unexpected expense, make a big purchase, or simply stretch their budget until payday, these apps are designed to be convenient, affordable, and accessible—even for those with less-than-perfect credit.

But what happens if you can’t repay your cash advance? This article will walk you through the potential costs, consequences, and steps you can take to stop automatic repayments if needed. We’ll also explain how to navigate tricky situations, like when your bank account doesn’t have enough money to cover repayment, and what to do if you’re worried about falling into a cycle of debt.

How Cash Advance Repayment Works

When you take out a cash advance, the app connects to your bank account (usually through a service like Plaid) to analyze your cash flow. It looks at factors like your paycheck schedule and spending habits to determine when you’ll likely have enough money to repay the advance.

Based on this information, the app automatically schedules repayment for your next payday. This includes the amount you borrowed plus any fees. The process is designed to be seamless—when payday rolls around, the app withdraws the money, and you’re all set.

But what if things don’t go as planned?

What If You Can’t Repay on Time?

Life doesn’t always go according to plan. Maybe your paycheck is delayed, or an unexpected expense wiped out your bank account. If you’re worried about repaying your cash advance, here’s what you need to know.

Changing Your Repayment Date

Most cash advance apps allow you to adjust your repayment date if you need more time. Here’s how it works:

  1. Check the App’s Policy: Apps like Brigit and Albert allow you to change your repayment date directly in the app or by contacting customer service.
  2. Act Early: You’ll usually need to make this change 2-3 business days before your scheduled repayment date.
  3. Understand the Trade-Offs: Extending your repayment period might reduce your borrowing limit on future advances, at least temporarily.

For example, if you borrowed $100 from Brigit and your repayment is set for Friday, but you realize on Tuesday that you won’t have enough money, you can log into the app and reschedule repayment for the following Friday. It’s a simple process, and there’s no cost to do it.

Dave vs Albert Cash Advance App Graphic

What If Your Account Doesn’t Have Enough Cash to Cover Repayment?

This is where things can get tricky. Let’s say you owe $100, but only $50 is in your bank account on the repayment date. Here’s what might happen:

  1. Partial Repayment: Some apps, like Dave, will automatically withdraw the $50 that’s available. This leaves your bank account balance at $0.
  2. Overdraft Risk: If you have other pending transactions (like a bill payment or debit card purchase), your bank might charge you an overdraft fee.
  3. Suspended Access: You won’t be able to take out another advance until your outstanding balance is repaid in full.

Even if the app can’t collect the full amount, it will keep monitoring your account for deposits. When new money comes in—like your next paycheck—the app may automatically try to collect the remaining $50.

For example, if you get paid $100 on Friday, the app might withdraw $50 from that deposit, leaving you with just $50.

The Problem with Repeated Repayment Attempts

The real challenge comes when the app keeps trying to collect the remaining balance over and over again. Here’s how this can put you in a tough spot:

  • Tight Cash Flow: If the app keeps withdrawing money every time you get paid, it can leave you with very little cash to cover your other expenses.
  • Extended Repayment Period: Some apps will continue trying to collect the balance for weeks or even months, which can make it difficult to get back on track financially.
  • Risk of Overdrafts: If the app withdraws money when you’re already low on funds, it could trigger overdraft fees from your bank.

For example, let’s say you owe $100 to Earnin, but only $50 is available in your account on the repayment date. Earnin takes the $50, leaving your balance at $0. A few days later, you get paid $500, and Earnin withdraws another $50, leaving you with $450. This cycle can continue until the full $100 is repaid, making it hard to manage your cash flow.

bank accounts with overdrafts for people with bad credit

What Happens If You Don’t Repay at All?

Cash advance apps are designed to be more forgiving than traditional payday loans. In fact, most apps explicitly state in their terms that you don’t have a “contractual obligation” to repay them. Here’s what that means:

No Legal Action or Credit Reporting

  • No Collections: Most apps won’t send your debt to a collection agency.
  • No Credit Score Impact: They won’t report your non-payment to credit bureaus, so your credit score won’t take a hit.

For example, Albert’s terms state that it offers advances on a “non-recourse basis,” meaning it won’t pursue legal action or report non-payment. Similarly, Earnin’s terms say you don’t have an obligation to repay, but you’ll be blocked from using the app until you do.

Potential Downsides

While the consequences are relatively mild, there are a few things to keep in mind:

  • Suspension or Ban: You’ll likely be blocked from using the app again until you repay your balance.
  • Subscription Fees: Some apps, like Brigit, won’t let you cancel your subscription while you have an outstanding advance. This means you’ll continue to be charged monthly fees until the advance is repaid.

Fun Fact: Brigit was sued by the FTC for this practice and agreed to refund $18 million to affected customers.

How to Stop Automatic Repayments

If you’ve decided that stopping repayment is your best option, here’s how to do it:

Step 1: Revoke ACH Authorization

Cash advance apps use the Automated Clearing House (ACH) system to withdraw money from your bank account. To stop repayments, you’ll need to revoke your ACH authorization. Here’s how:

  1. Contact Customer Service: Reach out to the app’s customer service team via email or their support portal.
  2. Provide Necessary Details: Include your name, account information, and a clear statement that you’re revoking authorization for ACH transactions.
  3. Do It Early: ACH transactions are scheduled in advance, so you’ll need to act at least 2-3 business days before your repayment date.

Pro Tip: If you’re short on time, try rescheduling your repayment for a later date and then revoking your authorization.

Step 2: Contact Your Bank

If you’re unable to reach the app’s customer service, you can also revoke ACH authorization by contacting your bank directly. However, this process is often slower and less efficient than going through the app.

Common Mistakes to Avoid

  • Deleting the App: This won’t cancel your account or stop repayments.
  • Disconnecting Plaid: Cutting off the app’s access to your bank account won’t impact ACH transactions.
  • Canceling Your Subscription: This won’t stop repayments from being processed.

Watch: What happens if you don’t repay a cash advance?

While cash advance apps are designed to be flexible and forgiving, it’s always best to communicate with the app if you’re struggling to repay. Rescheduling your repayment date is a simple and cost-free way to buy yourself more time.

However, if you’ve exhausted all other options and need to stop repayments, revoking your ACH authorization is the most effective solution. Just remember that this step may result in being permanently banned from using the app.

At the end of the day, cash advance apps are a tool—not a long-term solution. If you find yourself relying on them frequently, it may be worth exploring other financial strategies, such as budgeting, side hustles, or building an emergency fund.

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Mitchel Harad
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