How Does a Payday Loan App Work? 

In tough times, when money is running low, difficult decisions can include having food in your fridge or electricity in your home. Those living paycheck to paycheck know the angst that comes from seeing that you don’t have enough money in your account to cover the basic necessities. Many Americans in this predicament are increasingly turning to payday advance loans, a solution that can put money in your hands immediately, though it’s important to understand the terms of payday advance loans. 

Payday advance loans are a way to gain access to your money before payday. In much the same way that employees used to go to their employers for an advance, many businesses are now partnering with payday loan apps that allow their employees to access their money when they need it at a fraction of the cost of a bank loan or traditional payday loan. 

What is a Payday Loan App? 

A payday loan app is a 21st century way for employees to get their paycheck more quickly. These apps analyze how much money you make and until now have used that information to determine a loan amount they’re willing to offer. The loan amount, as well as all other fees and interest rates, vary from app to app. Some payday loan apps are regulated differently than traditional payday lenders. Unlike traditional payday lenders, a payday loan app does not “build credit history so you won’t improve your credit score,” according to Possible Finance.

How Does a Payday Loan App Work? 

A payday loan app works by figuring out how much money you will likely make and advances a portion of that money to you for a fee. According to Possible Finance, advances normally start at $100. Getting an advance generally requires a membership, tips, or fees. The apps rely on data from your bank as well as your location and your employer when determining whether to loan you money before you get paid. 

The cost of using a payday loan app varies from app to app. Some charge interest while others charge membership fees. Some apps charge both. Instant transfers often come with fees and apps may require users to pay tips. However, the tip rate on some apps has resulted in legal scrutiny from New York regulators worried that these apps may be skirting state lending laws. 

There are many benefits to using a payday loan app. The apps allow the borrower to receive money quickly, avoid high short-term loan fees, access financial protections such as overdraft protection, and requires little to no credit for potential users to start borrowing.

What is the Best Payday Loan App? 

Financial technology is a hot trend and payday loan apps are under that umbrella. There are many payday loan apps on the market, and each has its pros and cons. When deciding which payday loan app is right for you, check out the fees, interest rates, and accessibility options of each app to determine which fits your needs. Beware of hidden fees. Below, you will find a list of some of the highest-rated payday loan apps on the market, according to the website freeappsforme.com. 

• Brigit

Brigit allows employees to access loans of up to $250 and aims to help users avoid overdraft fees. This payday loan app’s benefits include an easy registration process and speedy approvals, the ability to connect with most banks, automatic cash infusions when your balance is close to $0, and smart alerts and notifications about your upcoming expenses and balance changes.

• Speedy Cash

Speedy Cash is a payday loan app that aims to help users maintain solvency without having to ask for favors or expensive loans. This app requires registration, but the process has been simplified. Notifications and reminders about your balance and upcoming payments are available, as is loan refinancing and secure payment methods. Speedy Cash allows users to change the due date of their loans, manage their accounts, and get cash quickly. Speedy Cash also has brick-and-mortar offices that can be located using the payday loan app.

• PayActiv

PayActiv focuses on making money available so its users can avoid the long and arduous process of a bank loan. PayActiv knows we can’t foresee emergencies, and this payday loan app works to make addressing those emergencies easier and quicker. It allows employees to access up to half of the money they earn or receive regularly when they need it. Unfortunately, PayActiv can only be used by employees of businesses that partner with the app. However, it is easy to register and use, and it provides extra tools to help with budgeting, bill paying, saving, and finding discounts and financial counseling.

• CashNetUSA

Users of this 4.7 star-rated app say it’s the best payday loan app around. One of its most talked-about features is the ability to apply for a loan directly from your cell phone. CashNewUSA lists amongst its benefits fast and easy application processes, access to your loan’s history, details, balance, and status, reminders and updates using push notifications, and calendar reminders. It allows users to make payments on the app at any time and provides fast support.

What is Required for Payday Loan App Approval? 

A payday loan app doesn’t function in the same way as a traditional payday loan service, and the approval process is different as well. Payday loan app approval is received after the user/applicant has provided the app with sufficient information. The app requires the user’s banking information, usually a checking account rather than savings so that the software can estimate a reliable pay schedule and the applicant’s average earnings. You will need to have a bank account with several month’s worth of history for the payday loan app to analyze.

According to Possible Finance, most payday loan apps will only offer loans to consumers who have received at least two paychecks from their employer. Applying for payday loan app approval can be difficult for users working in the gig economy because it can be hard to determine a consistent pay schedule. It’s possible that applicants will also be denied if they have a history of immediately spending their entire paycheck or have significant debt payments in your bank history.

Join a Free Pay Advance App Class Action Lawsuit Investigation

If you use a wage advance loan app and have had a negative experience, you may qualify to join this wage advance loan app class action lawsuit investigation.

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This article is not legal advice. It is presented
for informational purposes only.