3 Times Cash Advance Apps Make Sense

By Megan B. Shepherd

The way life goes, unexpected expenses when you’re low on cash or between paydays isn’t a far-fetched scenario. And, if you’ve weighed your quick cash options during a cash crunch, you know it’s a scary market out there with sky-high interest rates and predatory lenders.

Cash advance apps offer a quick and convenient way to borrow small amounts of money before your next payday, typically less than $500, but some go up to $1,000. Plus, you’re able to skip credit checks and interest altogether.

If you only need a small amount of cash to carry you over to your next payday, here are a few scenarios where a cash advance app may be your best option.

1. When you have bad or no credit

If you have no or bad credit and have tried applying for a loan in the past, you know that even if a lender considers you for a loan, you’ll be hit with extremely high interest rates.

Whether you have no credit history or you’re working on improving your credit score, a cash advance app offers a way to access quick cash without a credit check. Most cash advance apps have simple eligibility requirements, though each app varies slightly. General requirements typically include being at least 18 years old, having a bank account at least 60 days old and proof of some sort of earnings or direct deposit history.

2. You need a small amount of money fast

Cash advance apps typically offer funds within one to three business days, but most apps offer a way to get your money instantly or within minutes. Getting your money instantly comes with a small fee, typically ranging from $0.99 to $8.99, depending on the app. However, some apps include instant transfers for free with a paid monthly subscription to the app.

3. You’re a gig worker with inconsistent paydays

Cash advances offer gig workers like Uber drivers or freelancers a quick and easy way to access cash without a credit check or a consistent employer. Some apps, like Cleo, don’t even require a minimum amount of recurring deposits.

As a gig worker who depends on clients to get paid, there may be times between paychecks when you need extra cash for a bill or small emergency. Opting for a cash advance is your best bet compared to installment or predatory payday loans, as you’ll dodge the sky-high interest rates and have an easier time qualifying.

What to look for in a cash advance app

You have a fair number of options when it comes to cash advance apps, each with unique perks, fees and requirements. Here’s what to consider when choosing the best cash advance app for your situation:

• Compare each app's monthly fees, tipping requirements and instant transfer fees. Consider how you’ll use the app. For example, cheaper apps may sound appealing, but if you want access to regular instant transfers, you may opt for a tad pricer app with cheaper instant transfer fees.
• Customer reviews. Online reviews from your app store or Trustpilot are the best place to gauge what customers have to say about the app. Look for reviews about customer service, how easy or difficult it is to qualify and if the app is user-friendly.
• Cash advance limits. How much you can borrow varies widely depending on which app you go with. Limits range from $20 up to $500 or more, and increasing the amount you can borrow has different requirements depending on the app.
• Repayment requirements. With most cash advance apps, you’ll pay back what you owe with automatic deductions from your next paycheck. However, if you need more repayment flexibility, like extended repayment due dates, you may look for an app that offers this perk.
• Employer requirements. Most cash advance apps are open to the general public, but a few apps on the market require your employer to support the app, such as Branch, Even and Payactiv.
• Many apps offer budgeting, savings, credit-building and investing tools with their paid subscriptions.

Megan B. Shepherd is a personal finance editor at Finder committed to helping Americans navigate the financial world of loans and insurance. Megan’s expertise has graced the pages of Forbes, Fox, Time, Reviews.com, and carinsurance.com, adding invaluable information related to loans and insurance. Megan’s adept knowledge of financial topics has also led to contributions to reputable publications like Nasdaq and MediaFeed, where she intricately dissects and explains personal loans, financial strategies and smart borrowing tactics.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.