Chime loan review: Instant loans and early paycheck access

Two friends clothes shopping, one trying on a hat and looking in the mirrorImage: Two friends clothes shopping, one trying on a hat and looking in the mirror

In a Nutshell

Chime offers fee-free checking accounts with an overdraft service that can spot you up to $200 to avoid shortfalls and instant loans starting at $100. But the APR for instant loans is high.
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Pros

  • Ability to build credit
  • Easy overdraft avoidance
  • Early access to your paycheck

Cons

  • Only small loans are available
  • You must use a Chime checking account
  • High APRs on instant loans

What you need to know about a Chime loan

Chime is a financial technology company that aims to provide free or low-cost basic banking services to people across the U.S. It’s not a traditional personal loan lender, but it does offer some loan-like services to its members.

Chime’s primary product is an online checking account with no monthly fees. Once you open this account, you get access to several other products and services, including …

  • Chime Instant Loans These are small loans that Chime deposits into your checking account. Loans start at $100, though you may be eligible for larger amounts. You pay back these loans over three months, and you can have the payments automatically deducted from your checking account.
  • SpotMe This is Chime’s version of overdraft protection. SpotMe allows you to make purchases that overdraw your account up to $200 with no fees. Your next direct deposit goes toward any negative account balance.
  • Chime Credit Builder This is a secured Visa credit card with no annual fees, interest or large security deposit required. Instead, you move money from your Chime checking account into your Credit Builder account. The amount you have in your Credit Builder account is the total you can use for purchases on the card.
  • Early Direct Deposit You get access to your paycheck as soon as payroll information is sent to Chime, which may be up to two days earlier than you’re scheduled to be paid.

Convenient ways to get you through to payday

Instant Loans and SpotMe are ways to cover shortfalls between paydays and are available through the Chime app. You can get the $100 to $200 you need for day-to-day purchases, with automatic ways to pay them back. Just remember that these forms of borrowing can set you back like any other type of borrowing when repayment is due — so you’ll want to have a plan for getting back on track.

High APRs on instant loans

With Chime’s Instant Loan, you’ll pay $5 in interest for a $100 loan. This may not sound like much, but it comes out to an APR of nearly 30% for the three-month term. This is higher than you’d pay with many personal loan lenders, though few offer such small loans. If you’re looking to make every dollar count at this stage of your financial journey, you’ll want to avoid using Instant Loans unless you think it’s absolutely necessary.

Must be a Chime member

To access Chime’s programs, you must be a member with a checking account. If you already have a banking relationship elsewhere, you’ll need to switch to Chime to use its products.

A closer look at a Chime loan  

  • No overdraft fees — Chime’s SpotMe overdraft protection does not charge any fees.
  • No credit check required for Credit Builder When applying for Chime’s secured Credit Builder card, you won’t have to worry about a hard credit inquiry affecting your credit scores. 
  • National ATM network While Chime is an online company with no brick-and-mortar branches of its own, you’ll have access to about 60,000 ATMs around the country with no fees. You can locate fee-free ATMs in the Chime app.  
  • Savings accounts are available Chime also offers a savings account that pays 1.50% APY in interest and no fees.

Who is a Chime loan good for?

Chime can be a good option for someone who finds themselves just a little short of cash between paydays from time to time. The company gives you several options to meet your day-to-day expenses if your account runs dry, including the SpotMe overdraft and Instant Loan programs.

Chime can also be a good option for people who don’t currently have a bank account. The company offers a relatively low-risk banking option that helps you build credit. It can be a good starter bank account for people wary of fees.

How to apply with Chime

To start using Chime, you’ll need to sign up as a member and open a checking account. You can do this directly on the company’s website, using your birth date, address and Social Security number. There’s no fee to join Chime.

Then you’ll download the Chime app on your mobile device. At this point, you’ll fund your new checking account through an existing bank account or by setting up direct deposit from your employer. Once you’re set up, you’ll get a digital debit card you can start using right away, and Chime will send you a physical debit card in the mail.

Once you’re set up with a Chime checking account, you’ll have access to the company’s other benefits. You can enroll in SpotMe, apply for a Credit Builder card, or take out an Instant Loan all within the app.

To open a Chime account, you’ll need to be at least 18 years old and have the following:

  • Social Security number
  • Valid home address
  • U.S. citizenship or residency in one of the 50 states or Washington D.C.

Eligibility requirements for Chime’s programs vary. For the Credit Builder card, you’ll need a direct deposit of at least $200 from an employer or benefits provider within the past year. To use SpotMe, you need a direct deposit of at least $200 each month. For an Instant Loan, you’ll need “consistent” direct deposits into a Chime account in good standing (Chime doesn’t specify upfront how many direct deposits you’ll need to have to be eligible).

Not sure if Chime is right for you? Consider these alternatives.

  • Earnin: If you receive a steady paycheck, Earnin may be a good option for you. This app allows you to get up to $500 from your paycheck ahead of time, and works with your existing bank account.
  • Dave: The Dave app also allows you to get up to $500 to get you through to your next payday, and you can spend the money instantly with a Dave debit card.

About the author: Andrew Dunn is a veteran journalist with more than a decade of experience as a reporter and editor at North Carolina news organizations, including the Charlotte Observer and the StarNews in Wilmington. In those roles,… Read more.