Short on cash, but payday is too far away? There’s an app for that.
As of early 2022, research from LendingClub shows 64% of consumers are stuck in the paycheck-to-paycheck cycle. So more than half of the consumers surveyed are likely unable to cover an emergency expense.
One solution can be to use an app like Earnin. Earnin is a cash advance app that makes the money you earn available before your regular payday. Earnin can be a reasonable option to get you out of a small financial pinch with quick, no-fee access to cash.
But there are limits. Most new users can only get a cash advance up to $250. Plus, like other cash advance options, Earnin can provide short-term relief with long-term consequences if you don’t use the app responsibly. Here's what you need to know before using Earnin.
How Does Earnin Work?
Earnin tracks how much money you earn every day, and allows you to borrow against your accumulated earnings. So, as you work, your cash advance limit increases up to the maximum. Earnin tracks how much you’ve made at work by:
- linking to your work email,
- using GPS location to determine how long you were at work (this feature is called AutoMagic and only works if you don’t work remotely),
- tracking electronic timesheets.
Because you’re tapping into earned dollars as opposed to dollars you may earn in the future, you should be able to pay back the advance come payday. And Earnin will automatically withdraw the advance amount without any action needed on your end.
Earnin guides you through a few steps before you can request an advance:
- Download the app to your phone
- Add your employment information
- Link your bank account
- Wait two to three business days while Earnin verifies your information
- Receive cash advances instantly with Lightning Plus or an Earnin Express account
Anyone can qualify to use the Earnin app as long as you:
- are on a predictable pay schedule,
- receive at least 50% of your income in direct deposit,
- and use timesheets, an online time tracking system, or work at a fixed office that’s not your home.
Before receiving your first advance, Earnin may verify employment by sending a test email to your work email, through access to your electronic timesheets, or by tracking the GPS location on your phone. Once confirmed, you can begin cashing out $100.
Earnin certainly isn’t the only cash advance app out there, but you’ll be hard-pressed to beat its maximum advance amount. Users with the healthiest financial history can borrow up to $100 per day and $500 per pay period. But you have to earn your way to the higher cash advance limits. Beginners can get an advance up to $250, and as you pay back your advance and stay in good standing with Earnin, you can request higher cash advance amounts.
Earnin users who opt to open an Earnin Express deposit account and direct deposit their income into this account have a maximum advance limit of $1,000 or 80% of their income, whichever is less.
You can get your cash advance instantly with the Earnin Express account. Otherwise, eligible debit cards can use a Lightning Speed feature that makes your advance accessible within 30 minutes of request and approval — including weekends, holidays, the middle of the night, and whenever. Without Lightning Speed, Earnin sends an ACH debit to your linked bank account, and funds are available within one to three business days.
Is Earnin Free?
There are zero charges, zero fees, and zero interest for an Earnin cash advance. How can so much be offered for free? The app makes 95% of its operating capital off tips. You’ll have the option to give a voluntary tip, from $0 to $14, as an appreciation for the service. Electing not to tip does not affect your ability to continue using Earnin.
However, regularly tipping keeps one feature, Balance Shield, automatically running, so your account never gets below a certain set dollar amount. You can always manually turn Balance Shield on or off in the app’s settings, whether you tip or not.
Is Earnin Safe?
Sharing your sensitive financial information with any app should give you pause. Earnin requires screenshots of your bank account activity and information so they can direct deposit into your account, verify your income, and determine your pay date. However, all of your sensitive data is protected behind firewalls and the latest in encryption technology.
Earnin has also been accredited by the Better Business Bureau since 2019 and holds a BBB Rating of A-.
Earnin is a legitimate way to access cash advances with no mandatory fee. And, if you open an Earnin Express deposit account, your money is FDIC insured up to $250,000, thanks to the custodial agreement from Evolve Bank & Trust.
Who Is Earnin Best For?
Financial emergencies happen, and Earnin can be a safe way to gain access to cash without paying high interest rates or fees. However, cash advances should be seen as a quick fix while you work toward building an emergency fund, not a regular financial habit.
Frequently tapping into cash advances to cover your living expenses is a sign that your expenses outweigh your income. To get back on track, you’ll need a financial solution that raises your income or lowers your expenses, neither of which a cash advance would provide.
Earnin is best for the worker with a predictable pay schedule who receives most of their income from one employer. Earnin is also best for people who don't have a credit card for emergencies or don't want to worry about paying off a credit card before interest accrues. Those employed less traditionally (if you have many side hustles and get paid sporadically) will have a difficult time qualifying. Currently, Earnin also does not offer cash advances to people basing their income on Social Security payments or any other government benefit.
Earnin Pros and Cons
Pros:
- No fees or interest
- No credit check
- Promotes financial health by only advancing money you earn
- High maximum advance limits
- Quick access to advance cash
- Access to features that improve financial standing, including Balance Shield and Tip Yourself savings
Cons:
- Only accessible through the app
- Using apps like Earnin can lead to unwise financial habits, such as relying on cash advances instead of building an emergency fund
- Not available to freelancers and contractors who are paid unpredictably from many sources
- Not ideal for consumers looking for financial technology to integrate checking, savings, investing, crypto, and the whole suite of financial services beyond cash advances
- While Earning does use safe technology, some users might not feel comfortable with an app tracking their work email and their location
Earnin Alternatives
Brigit
Brigit is an app that offers instant cash advances when you connect your bank account and bank debit card to Brigit. Cash advance amounts range from $50 to $250. Brigit looks at your bank account and your spending habits to decide your cash advance limit.
Also, if your bank account falls below a certain threshold, Brigit can automatically deposit a cash advance, saving you from going into the negative.
Other Brigit features include credit building, flexible advance repayment, budgeting tools, and financial insights. The app costs $9.99 to use most of its financial wellness features, including cash advance. To make it worth the cost, Brigit is best for someone looking to overhaul their financial habits and use all the available financial tools they have to offer.
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FAQs
What happens if you don’t tip Earnin?
Nothing at all. Tip or don’t tip. You have access to the same Earnin features.
Does Earnin contact your employer?
Earnin does not contact your employer. But they may ask you to verify your work email or any online time logs so they can track your earnings.
What’s the catch with Earnin?
The catch is, many people won’t qualify for Earnin in the current work culture and economy.
Earnin relies on users having a traditional means of employment, either in a fixed office space or income from one primary employer that pays on a predictable schedule. Hourly workers must prove that they make at least $4 per hour. This may leave out folks who work with many clients, have many gigs, or receive a large portion of their income in tip money, such as restaurant servers.
Is Earnin better than a payday loan?
Yes. Many payday loan lenders offer predatory services and sky-high interest rates that are misleading and unfair to the consumer. Earnin is a better option, but you still need to be careful with the tip function. It may seem like a small way to say thank you, but the tips can add up. To illustrate, a $5 tip for a $100 cash advance received 14 days before your paycheck comes out to a 130% APR.
Final Thoughts
Apps like Earnin can offer relief when you need a quick $100 or $200 for an emergency. But a cash advance is best left for those exceptional circumstances and shouldn’t become part of your financial routine.
Ideally, a cash advance app is a bandage that gets you to your next paycheck while you grow a reliable emergency fund little by little. Then, the next time the unforeseen hits, you can pull from the funds you stash away.