It’s not entirely unheard of for there to be a little gap between receiving your paycheck and bills becoming due. When this happens, don’t ruin your credit score by paying late: a mistake like that remains on your credit report for years and comes with a whole flock of consequences. A better option might be to use cash advance apps like Dave to get a quick alternative to a payday loan. They offer some instant cash in your checking account that you’ll need to pay back during your next pay period.
One word of caution, though: cash advances are supposed to be a last resort, helping you to stay solvent until payday. They’re cheaper than having to fork over overdraft fees or requesting a cash advance on your credit card, but if you need a large amount of cash, you’re better off looking at installment loans or payday loans. If you often find yourself with a lot more month than money, the only long-term solution is really to change your financial habits and save more diligently.
How Do Cash Advance Apps Like Dave Work?
Payday loans used to be available only from storefront establishments, severely limiting consumers’ options and allowing lenders to charge absurd interest rates. This situation improved a great deal with the coming of the internet: several websites now will enable you to compare various instant loans and select the cheapest one with little more than a click of the mouse.
Cash advance apps, like Dave, are the next logical step. The idea is as follows: assuming that you’re employed, and you’ve already earned some money by putting in the hours, but you may still have to wait a few days for your next paycheck or direct deposit to arrive. Dave and other apps like it give you access to cash in your bank account. To get started, all you need to do is download the app, connect your bank account, and upload copies of a few pay stubs. Approval takes about two days, after which you can borrow $25, $50, $75 or $100. Not everyone qualifies for the higher amounts, but even $50 is sometimes a lifesaver, allowing you to fill up the car or buy groceries without your bank account dipping under zero.
Unlike payday loans, Dave doesn’t charge interest on the money you borrow. Instead, you pay a membership fee of $1 per month for using the app, the transaction fees associated with repaying the loan, as well as voluntary “tips” on each loan to keep the Daves in coffee and doughnuts. This alternative seems like a pretty good deal, especially as Dave comes with the following additional features:
- It will help you create a budget, monitoring your expenses and learning your financial habits over time,
- You’ll get a warning if you’re heading into overdraft territory, allowing you to request a cash advance rather than pay substantial overdraft fees,
- Through an agreement with LevelCredit, Dave gives you the option of reporting your rent and utility payments to the three major credit bureaus, improving your credit score over time in much the same way as making payments on installment loans,
- If you have strained finances, it will even help you to find a side hustle to augment your income.
Are There Alternatives to Dave?
The introduction of Dave caused quite a stir in the banking world, and it remains one of the most popular ways to get a cheap payday loan. Still, there are several apps like Dave, which may suit you better for one reason or another.
Earnin
Earnin works in much the same way as Dave but doesn’t charge a membership fee. Instead, they fund app by tips you can pay, or choose not to when payday rolls around, and you pay back the cash advance. The only real requirement to use it is that you have to be paid by direct deposit.
It allows you to request up to $100 per day or $500 in any one pay period. Like Dave, it keeps track of your bank balance and will advance you $100 automatically if you’re at risk of an overdraft. Also, Earnin lets you earn cashback on linked debit or credit cards and will even try to negotiate lower prices for medical care if you send them a copy of the hospital bill. Like Dave, this company seems committed to fighting unfair banking practices and helping ordinary people take control of their finances.
MoneyLion
MoneyLion lets you borrow up to $250 against your next paycheck, and you don’t even have to wait until the next business day for it to show up in your bank account. Unlike Dave, MoneyLion gives you a full-fledged checking account instead of linking the app to your current bank.
The best part is that this account costs you pretty much nothing. Using any of 50,000 ATMs is free, as is investing in exchange-traded funds and monitoring your credit score. If you choose to pay a $19.99 monthly membership fee, you’ll also have access to low-APR loans of up to $500 – these are handy tools to improve your credit.
Brigit
You can borrow up to $250 using Brigit and, unlike with most payday loans, pay it back early or roll it over up to three times without having to pay any penalty fees. There’s no credit check involved, and you’ll have access to the money within minutes.
If you pay the $10/month membership fee instead of using the free version, the app will automatically give you a cash advance if your bank account balance is about to dip below zero. Unlike Dave, unfortunately, Brigit is pretty selective about their customers. You’ll generally have to have been at the same job and bank for at least two months, earn an unspecified minimum income and have banking habits that fit their profile of a responsible consumer. Like Dave, this app will help you to track your spending and hook you up with a side hustle if you need it.
Even
Instead of having a fixed maximum loan amount, Even gives you access to a sum based on how much you’ve already earned in the current pay period. It’s not, however, available to everyone: you need to plug the app into your employer’s payroll software. It may be a good idea to suggest this to your boss: joining their program doesn’t cost anything and can be a significant benefit for employees.
The app will also help you control your spending, for instance, by alerting you to upcoming expenses. It will also let you automate your savings: putting some money away each month is the best way to ensure that you don’t need a payday loan in the future. Even costs $2 per month to use – interestingly, if you don’t use it for two months in a row, this charge is waived, though you still have the option of requesting an advance on your next paycheck.
Which Is the Best Instant Loan App for Me?
There is an astonishing number of apps out there that all offer instant, zero-interest cash advances. All of them are worth investigating, and a couple can even work as a replacement for a traditional checking account.
In general, though, you’ll want to install only one of these options and stick with it. Some, for example, allow you to borrow more money the longer you’re a member, while extra features like assistance with budgeting and improving your credit score takes some time to show results. Since you will probably use cash advance apps when you face unexpected expenses, like a dead car battery, a speeding ticket, or an unavoidable last-minute trip, you should check how quickly each pays out. Some can give you access to your money within a few minutes, while others force you to wait until the next business day.
If you don’t think you’ll need a cash advance to cover ordinary expenses and you’re mainly browsing apps to cash in on their additional perks, you’ll probably be better off with one that doesn’t charge a monthly membership fee. On the other hand, there are plenty of budgeting apps out there that can help you improve your spending patterns; having access to a cash advance app like Dave, on the other hand, gives you the peace of mind of knowing that you’ll be able to survive until payday.
Do you use one of the apps mentioned above, or perhaps a different one? Do you think this kind of cash advance is a suitable alternative to a payday loan? Please take a minute to share your thoughts and experiences in the comment section; you’ll be helping the rest of us to make better decisions!
Loan apps are really life saver. I use it regularly as my pay check is from month to month and usually there some expenses that I don’t expect during the month. However I am very cautious with using this kind of loans as sometimes if you do not pay attention you can instead being a life saver turn into ruining you next pay check and force you to make more loans. I am using this apps for a couple of years and it really saved me a lot of times. I’ve done some extensive research before started using the apps and choose the option that suits me most. I highly recommend everyone should do it. In your article you pointed some of them so it is a good start for someone to start checking the applications available. But first things first, everyone should decide how often he needs the loans and for what and then decide which app to use. The article is great, people do not know the options that are available. Instead of borrowing money from friends or family, use the app and you will get rid of some of the unexpected expenses.
Thanks for the article. Couple of times I was in the situation of being left without money and I had to borrow some from friends. Maybe this way I will be able to manage it differently. I am getting into research of what app to use. As I rarely need some income between the pay checks probably I will need some app that I can occasionally use.
These applications are scam. I’ve tried some and they do not approve or always there are some issues with the account. Definitely you should not advertise them this way. People get into loans and can not get out. They will end up paying some additional fees. No, these loan apps are not for use.
We all have different opinions for different things. I am not fan of using this kind of apps. Although I have to admit that the offer is tempting to have some money “in reserve” when you are far away from the next paycheck and you need them urgently to finish some things that you didn’t count on. I put aside $100 for such cases. I think it is better to do it that way instead of taking some loans that you will have to pay from the next paycheck. And if you spend them you can always return them from the next paycheck. This way you always have a loan of your own. I was always cautious with spending money and saving. Of course it is not always possible to avoid additional expenses but this way at least you will not pay fees for loans and thing like that. It is all up to a good organization.
I enjoyed reading the blog. The topic is awesome. Working two jobs and juggling between the paychecks this is really a good option for me. I have to do research about everything that you stated. Maybe the apps with membership fee a good option for me because almost every month I need some money to get me through till the next payment. At least this way I do not have to ask my family and to feel uncomfortable borrowing money. With all the expenses, rent and bills that have due time, these days it is very difficult to stay solvent and to pay everything on time. So these instant loans can really help. At least you can feel calmer when you know that you have some amount of money that you can spend. I will definitely get into research and decide which app to use. Thankyou for the tips. I will check the one that you’ve stated in the article first
Everyone should be very careful using these applications
I use Dave for a couple of years and I think it is the best loan app on the market. The $1 is neglectable and the benefits of having sum of money at your disposal is great. Over the time I learned to monitor my expenses and my balance which was not the case previously. And I somehow do not need that extra loan as previously. Despite of that I avoid asking friends of borrowing money when I needed. Of course there are different apps on the market suited for different people but definitely Dave is number 1. The $1 is withdrawn from your linked account monthly, no additional fees requires, you can choose to pay some tips or not and you have $100 when requested. To use the application you have to have a steady income and the withdrawal to return the loan is automatic if you do not pay it manually before due date. Anyhow like every app it has pros and cons but I suggest to do some research and to try it if you need monthly loans without paying an interest on it.
My opinion about these kind of apps is that everybody should use them if need some money to go through the months until the next payments. We are forced to find some ways to survive when the economy is going down and it is hard to find a job.