This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
Sometimes you’re a bit short on cash and your payday is a few too many days away. What financial tool could help you out in such a situation? The Earnin app might be the solution to help you stay on track with your finances.
An alternative to payday loans, the Earnin app promises to give you “access to the pay that you’ve earned, when you want it.” Let’s jump into our Earnin app review, and learn if this new service can help you when you’re a bit low on cash.
Earnin
Borrow up to $500/pay period, and up to $100/day
Instantly cash out your loan (fees apply)
Operates on voluntary tips, so no mandatory fees
What Is the Earnin App?
Earnin, formally known as ActiveHours, is a paycheck advance service that aims at getting you your earned money before your payday. We’ve seen these types of services before in the form of terrible payday loans. You need some more cash before your payday arrives, so you borrow money from a service that then charges you interest rates that are typically outrageous.
That is where Earnin stands out; the interesting catch is that you don’t need to pay anything to the service as the entire business model is based on voluntary tipping. Seriously; you can request to borrow up to $500 before your next paycheck, then when you are paid, Earnin automatically withdraws the borrowed money from your bank account.
But, how easy is it to get money from the Earnin app, do you need to qualify to use the service, and is it really better than the fees from a payday loan? Keep on reading as we explore just exactly how the Earnin app operates.
How Does the Earnin App Work?
The Earnin app works by analyzing the time that you work, and giving you fast access to your paycheck before your typical payday. Let’s explore some of the basic concepts of the Earnin app to help you better understand if it’s the right service for you.
We’ve answered some of the most common questions that users have about Earnin, and we tested the app hands-on to form our own thoughts.
How Do You Qualify for the Earnin App?
Don’t worry, Earnin isn’t looking for your credit score, unlike a personal loan or payday loans might. In fact, Earnin plays the financial game a bit differently in a few ways. The Earnin app basically just needs to know that you have a job with a regular pay schedule to qualify. But, how does Earnin know that you are working?
When you join Earnin, you’ll need to connect the service to your checking account. From there, Earnin will be able to see exactly how much you are, well, earning via direct deposit.
You’ll need to ensure that over 50% of your direct deposit is sent to a checking account. If that’s not the case, for example, you get paid via old-fashioned paper checks or split your pay between more than one checking account, the Earnin app isn’t for you—sorry folks.
If you are uncomfortable with an app tracking your work location or having access to your bank account number, you may want to find an alternative to Earnin.
Next, you’ll need a consistent pay period as we mentioned, such as being paid weekly, biweekly, semi-monthly, or monthly (a paycheck to paycheck cycle). If you have an odd pay schedule or don’t get paid regularly, such as in the scenario with many freelancers, you’ll be ineligible for the service.
Lastly, you’ll need either a fixed work location (such as a physical office building), an online timekeeping system, or a paper timesheet. Earnin needs to know that you are going to work somehow, either via tracking how much time you spend in the office via the smartphone app or verifying official records.
How Much Does the Earnin App Cost?
Earnin has zero mandatory fees and relies on voluntary tips from the community — seriously, there is no trick here. When you choose to borrow money from the service, you can select to tip up to $14, or tip nothing at all; it’s your call.
The tips help to keep the service running smoothly, and apparently, the company has been doing fine running on that model since it was established in 2013. That’s quite a payday loan alternative with a reputation!
What we can say for certain is that in our testing, we were happy to throw a few bucks to the service as a voluntary ‘thank you’ and the tip amount was a much lower percentage than typical payday lending services.
But, if you want to tip nothing, you are free to do so. It’s also critical to note that your tipping rate does not affect your Max, the maximum amount of money you can request to borrow per pay period. But, speaking about your Max…
How Much Can I Borrow From the Earnin App?
The Earnin app has two maximums that you should keep in mind. The first Max is your Daily Max, which is the same for all members — $100. Members cannot request to borrow more than $100 per day from Earnin.
The second Max is your Pay Period Max, and this dictates how much money you can borrow between pay periods. Based on multiple factors, your Pay Period Max can range anywhere from $50 to $500.
Earnin is not 100% upfront with how they calculate your Pay Period Max; the company simply states that “your pay period Max is determined based on a number of factors we believe are related to evaluating your financial health.”
There are a few hints at what determines your financial health, such as how often you maintain a positive checking account balance, if you spend less money than you make, and if you pay back your loaned money on time.
Overall, Earnin’s financial health criteria don’t seem to be much different than what we would suggest with a good personal finance plan—just avoid those poor financial habits to up your pay period limit.
How Long Does it Take to Get Money From Earnin?
If you want to quickly get money from the Earnin app, you’ll want to sign up for the Lightning Speed feature, which simply entails linking an eligible debit card to your account. With a debit card attached to Earnin, you can request and have access to money within minutes.
If you opt to use Lightning Speed, you will be charged a fee (it’s one of the service’s few fees) for convenience. The fee to use the service ranges from $1.99 to $3.99, depending on how much money you are attempting to cash out to your bank account.
Earnin does not support prepaid accounts, including employer paycards, at this time. For more information, be sure to visit Earnin’s support page detailing prepaid cards.
If you don’t have access to the Lightning Speed feature or don’t want to use it in order to avoid fees, your loan transfer will take the industry-standard 1-3 business days to make it into your checking account. So, you’ll need to decide what’s more important, saving a few bucks or having instant access to your loan.
Alternatives to the Earnin App
If you aren’t too keen on the Earnin app, there are a couple of other non-personal loan alternatives that you may wish to try out instead. Although, we also have a roundup of personal loans that you may want to consider if appropriate.
Here are two options that we recommend alongside Earnin so that you can find the best app for you to loan a bit of money before your next payday.
Earnin Alternatives
Details
Earnin
Dave
Brigit
Charge to use
Service operates on optional tips from $0-14.
Service operates on optional tips, plus $1/mo fee.
$9.99/mo. Includes services for building credit.
Maximum loan
Individually set by Earnin, up to $500/pay period.
Individually set by Dave, up to $250/pay period.
Individually set by Brigit, up to $250/pay period.
Transfer time
Instant w/ fee, or bank transfer up to 3 days.
Instant w/ fee or bank transfer up to 3 days.
Same day bank transfer, up to two days.
Frequently Asked Questions (FAQs)
You will be unable to utilize the Earnin service in the future until the past due amount is repaid. Additionally, not paying back Earnin could impact your overall max loan amount if you do opt to use the service again.
No, Earnin does not contact your employer in any way. Earnin is not associated with your employer and does not work with them. You are free to use the Earnin app without your employer being notified.
No, Earnin does not affect your credit score in any way, unlike a traditional payday loan. Additionally, Earnin does not utilize your credit score information in its eligibility decision.
The Earnin app offers a feature known as Balance Shield. If you enable the Balance Shield for your account, Earnin will automatically provide you with a loan if it believes that your bank account balance is about to drop into the negatives.
Michael Archambault is a senior writer for The Penny Hoarder specializing in technology.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.