Getting a loan using an app is sometimes just the easiest and quickest way to get cash when you urgently need it. Not all apps are the same though. You need to closely check out the app description and read money lending app reviews before you choose a lender.
Let’s look at some of the different apps you can choose from, including which app is best for which type of loan.
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You get different types of money lending apps and they are all suited to different borrowing requirements. Some apps are great for getting a little cash without paying any interest at all. Also called an overdraft app, these apps are excellent replacements for overdrafts where you just need a couple of dollars for a short period, but you don’t want to pay an expensive overdraft fee. You can borrow amounts in the range of $25 to $75 with an overdraft app.
You get a different range of apps which are better for larger loans. These usually won’t offer you loans for free. However, though you will be charged interest, you can borrow as much as $30,000 with apps that are geared towards larger loans. So, before you pick an app, first think about how much money you need to borrow, and how long it will be before you can pay back the money.
It is quite common for people to be just a little short of money. You don’t need a big loan, you just need $50 or $200 to pay an unexpected bill or to cover you for a few days until you get paid. Small loans are a completely different requirement compared to a large, long-term loan. Thankfully, plenty of apps are great for small loans.
Let’s look at Dave and Earnin for example. With the Earnin app you can get an advance of up to $500 as long as you manage to link Earnin to your payslip. Note that new customers can borrow only $100 a day with Earnin. The Dave app is another alternative for small loans, but you are limited to $75 with Dave. Thankfully with apps like Dave it is really easy to get a loan, in the case of Dave you just have to pay the $1 a month subscription fee.
There are no interest charges with Earnin and Dave. Another option for small loans is the MoneyLion app. MoneyLion offers what looks like an interesting deal: you can get immediate access to up to $500 in loans and you only pay 5.99% in interest charges. But MoneyLion has a catch, you must subscribe to the MoneyLion Plus service which has a $29/month membership fee, though you can recoup the fee if you regularly log into the app.
You don’t need to go to a bank if you want to borrow a large sum of money. You can use a money app to borrow as much as $30,000. Avant, one of the longest-standing money apps offer large loans but to qualify for a large loan with the Avant app you will need a good credit score. Avant does offer smaller loans at higher APRs to people who have less than perfect credit.
Another app that is a top choice for larger loans of up to $2,500 is the PockBox.com app. You can get your funds on the next business day with PockBox. The company will consider customers who have adverse credit history, making Rainy Day a good option if you need a large loan but you don’t have a great credit history.
Also consider the SoFi app for larger loans. You can borrow between $5,000 and $100,000 with SoFi but the lender only considers applicants that have a very good credit score. Nonetheless SoFi APRs are very attractive and you get access to extra app features with SoFi, including members-only access to the SoFi Community.
Does a free loan sound like a crazy idea? You can’t borrow a large amount of money for free, but Earnin may offer you just the amount you need – free of charge. With Earnin you can borrow up to a maximum of $500 per pay period, with a $100 maximum per day. There are no interest charges or fees for using Earnin.
Earnin makes its money via a tipping system, tips can be as much as $14 and you don’t get access to all of Earnin’s features if you never tip. For example, Earnin offers overdraft protection which automatically activates a loan if you go overdrawn. However overdraft protection is restricted to one use if you never tip. If you regularly tip you can enjoy ongoing overdraft protection. Earnin is available on iOS and Android.
Remember that even if a provider promises near-instant approval that does not mean your funds will be available instantly. It is common for a provider to approve a loan nearly instantly but transferring funds usually take at least a working day, or more. Every lender has a different policy when it comes to depositing loans and you can expect large sums to take a few working days to land in your account.
For example, Avant approves your loan almost instantly in many cases but provides you with funds only the next day with some loans taking even longer to clear. Rainy Day Lending also promise quick approval but your loan funds are deposited into your account the next day.
There is one exception. Earnin users that have enabled Earnin Lightening Speed by linking their debit card to Earnin can get loan funds deposited nearly instantly. Other Earnin users have to wait until the next business day for funds. Also, singing up to Earnin and enabling Lightening Speed on Earnin takes a day or two, you can only enjoy instant Lightening Speed loans after signing up.
A handy Android or iOS app is the perfect way to get access to quick funds, but not every money app has a mobile app and not every app allows you to complete the entire application process on your phone. Yet some providers do a great job of presenting an excellent, highly-rated app to their users.
Dave and Earnin are both top examples of mobile loan apps where you can both borrow money using an app and also manage your loan with it. Earnin also helps you monitor your bank overdraft using the Earnin app. MoneyLion is another great example of an app that lets you borrow money using just your phone. You can even save on the MoneyLion Plus subscription fee just by using the MoneyLion app.
On the other hand, providers such as Rainy Day Lending do not offer mobile phone apps at all. You can only apply for a Rainy Day loan by using the Rainy Day website. Other providers are somewhere in-between: Avant does not let you apply for a loan with its mobile app but you can manage your loan including payment schedule and outstanding balance using the Avant app.
Just because an app has successfully made it into an app store does not mean that the company behind the app is a reliable lender. You should always read the reviews and experiences posted by other users before you download an app, and before you take out a loan.
One example of an app that has left many users frustrated is ACE Cash Express. ACE promises quick and easy payday loans but reviewers complain about customer services that are difficult to deal with while also complaining that the app simply does not work, freezing as soon as you try to apply for a loan.
Security Finance’s $MyLoan$ app is supposed to let you manage your Security Finance loan account on your phone but users are not happy. Users complain that the app constantly crashes and that it is difficult to reset your password if you forget what it is.
Money lending apps are popular for lots of reasons. First, people are often finding that they are short of cash when they least expect it. Sometimes it is a matter of overspending in a month but it can also be due to an unexpected bill. An app is simply an easy way to borrow money when you need it urgently.
Next, money apps are technology driven. The imaginative tipping system used by Earnin for example is a great way to encourage users to pay for their loans while at the same time ensuring that people who cannot afford interest and charges won’t pay any.
Apps can also turn a profit from analyzing the data they collect by connecting to your bank account. The technology factor is replacing the interest charge factor for many apps but interest charges still make up a large part of the profits for many money apps.
As with any loan users should watch out for traps with money apps. Make sure you know exactly what the interest and charges are for an app. Consider how reliable the provider is: is your data safe, for example? Also read money lending app reviews to see what other users say about their experience. Finally, some apps can trap you into subscription products if you take out a loan, watch out for ongoing subscription charges when you sign up to an app.