Earnin app review: A payday loan alternative that promises no fees

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In a Nutshell

Earnin is an app that lets people borrow money against their paychecks. Earnin says it doesn’t charge fees or interest either. Instead, the company asks for tips. But you’ll have to meet eligibility requirements and sacrifice some privacy to use the app.
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Pros Cons
No interest or fees and tips are optional Eligibility is limited based on how you’re paid or what kind of job you have
Balance Shield can help prevent overdrafts from your bank account You sacrifice some privacy
Available for both Android and Apple users Low withdrawal limits

What you need to know about the Earnin app

Earnin is an app that, similar to a payday loan, lets you use your next paycheck as collateral to get money the same day. Earnin works by automatically deducting the amount you borrow from your checking account on your next payday. If you’re thinking about using the app to get cash before you get paid again, here are a few things to consider.

Eligibility is limited

To use the app, you must have direct deposit to a checking account set up through your employer, have a consistent pay period — weekly, biweekly, semi-monthly, monthly — and either work at the same location each day or use online timesheets to track your hours.

Your rate of pay based on the amount deposited to your account — meaning after taxes and other deductions have been deducted from your paycheck — must be at least $4 an hour. Unemployment, Supplemental Security Income and disability payments are not included in Earnin’s calculation.

Earnin calculates your take-home pay rate based on the money that’s direct deposited into your bank account from a single employer and your work schedule. If you earn commissions, tips or have a side gig, that additional income can’t currently be included in your earnings. One notable exception is that Uber and Earnin have a partnership that allows drivers to use the app.

You sacrifice some privacy

To set up your Earnin account, you must provide your bank account number and routing information to link the app to your checking account.

After your account is set up, you must either upload copies of your timesheets or enroll in Automagic Earnings to have Earnin track your hours automatically, using your phone’s GPS to determine when you’re at work.

Low withdrawal limits

The first time you use the app, you can borrow only up to $100 during your pay cycle. But with repeated use, Earnin may adjust your withdrawal limits up to $500 based on how you use the app, your spending habits, what bank you have and whether your employer works directly with Earnin.

If you borrow the maximum allowed amount, you can’t get more money until your next pay cycle begins.

If you only want a small loan, Earnin’s low withdrawal limits can help prevent you from borrowing more than you need. But if you’re looking for a larger loan amount, Earnin probably isn’t your best bet.

No interest or fees

Earnin says you won’t pay interest or fees when you borrow money using the Earnin app. Instead, the company does encourage users to “tip” an amount they feel is appropriate for using the service. But tips aren’t required to use the app.

A closer look at the Earnin app

If you’re considering using the Earnin app to get a cash advance on your next paycheck, here are a few more things to know.

  • iOS and Android: The Earnin app is available for both Apple and Android users.
  • Waiting period: It can take up to 72 hours to activate your account after you sign up.
  • Direct deposit minimums: You must have a minimum of two direct deposits totaling at least $100 into your checking account to start borrowing money through Earnin.
  • Lightning Speed feature: This tool gives you access to your money the same day you request it. So if you’re not signed up for Lightning Speed, you may not receive your money until the next business day. And Lightning Speed isn’t available at all banks.
  • Overdraft protection: Earnin could help you avoid overdraft fees when you sign up for the Balance Shield feature, which lets you know when your bank balance is getting low. You may also choose to have amounts of up to $100 automatically transferred to your checking account to prevent overdrawing your account.

Who the Earnin app is good for

Earnin may be a good choice if you occasionally need a small amount of extra cash before your next paycheck and you meet the app’s eligibility requirements.

But continually borrowing against your future earnings isn’t a sustainable financial practice. If you repeatedly use the Earnin app as an alternative to a payday loan, it may be better to review your overall financial situation and make some changes to improve your financial health.

How to set up an Earnin account

To sign up for Earnin, first download the app on your Android device or iPhone. Then follow the prompts to set up your account. You’ll need to provide the following information:

  • Email address
  • Password
  • Paycheck information
  • Bank name
  • Bank account information
  • Employer information

Not sure if the Earnin app is right for you? Consider these alternatives.

  • TD Bank: A personal loan from TD Bank could be a good choice if you’re looking for a larger loan amount.
  • Prosper: Prosper might be a good option for people who don’t meet Earnin’s eligibility requirements. Read our Prosper personal loan review to learn more.

About the author: Jennifer Brozic is a freelance financial services writer with a bachelor’s degree in journalism from the University of Maryland and a master’s degree in communication management from Towson University. She’s committed… Read more.