Earnin app review: Paycheck advances

Pros

• No interest
• Low balance alerts
• Early paycheck access

Cons

• Withdrawal limits
• Eligibility is limited to those using direct deposit

What you need to know about the Earnin app

Earnin is an app that allows workers to access money from their paychecks before payday arrives. Earnin isn’t a lender and does not offer loans. To use this app to access money, you don’t need to pay mandatory fees or interest – instead, the funds you get are later repaid from your paycheck via direct deposit. That makes it a much better solution than payday loans, which often come with notoriously high fees.

Instead of mandatory fees to use its app, Earnin requests (but doesn’t require) that users leave a tip when they use the Cash Out feature. The tip is deducted from your bank account once your paycheck is deposited.

Low withdrawal limits

Earnin’s withdrawal limits are relatively low. Users can only withdraw as much as $100 of their paycheck each day, with a limit of $750 per pay period.

Eligibility is limited

In order to use Earnin, you have to be an employee who gets paid by direct deposit into a bank account.  Because of this requirement, people who are self-employed or who don’t have a regular paycheck may not be eligible to use Earnin.

You also have to direct deposit at least 50% of your income into your checking account and be on a regular pay schedule. Your pay schedule can be weekly, biweekly, semi-monthly or monthly, but it has to be consistent. You’ll also need to work at a fixed location and provide a time sheet to Earnin, either through an online or electronic timekeeping system or by sharing a printed or PDF time sheet.

Low balance alerts

Earnin’s Balance Shield feature will alert you if your account falls below a certain balance. This feature can make it easier to keep on top of your finances and avoid getting hit with overdraft fees. Balance Shield can be used with any checking account from any bank, as long as you sign up for Cash Out and turn on the Balance Shield feature.

With Balance Shield Cash Outs, $100 of your pay automatically will be deposited into your checking account to make sure that your balance stays in the green.

A closer look at the Earnin app

• Not a personal loan — The Cash Out feature is not a loan and does not charge interest. Also, unlike personal loans, Earnin doesn’t report repayments to the credit bureaus.
• You sacrifice privacy — The Earnin app requires you to give up some privacy to use it. To start, you have to validate your employment and work attendance through methods like work-email verification, time sheets, wage stubs and GPS location services. You also have to connect your bank account to the app.
• iOS and Android — Most Android and iOS users can use the Earnin app.
• Deposits appear in seconds — Thanks to Earnin’s Lightning Speed feature, you may be able to access money in a matter of minutes (for a fee), even on weekends or holidays.

Who is Earnin good for?

If you need to access a small amount of cash before your next paycheck arrives, Earnin can be a much better option than a payday loan, which can charge fees equating to a 400% APR.

That said, getting an advance against your paycheck — money you haven’t yet earned — isn’t a habit you want to develop. If you find yourself needing to use the Earnin app repeatedly, your budget probably needs review — and making some changes could save you from relying on this app to make it to payday.

How to apply with Earnin

To apply for Earnin, you need to follow these steps:

• Download the app
• Connect your bank account
• Upload your employment information
• Add your earnings

To add your earnings to the app, you can send an electronic timesheet. If you don’t have a timesheet, you can sign up with your employer-provided work email address or use Earnin’s Automagic Earnings feature.

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

• PayActiv: With PayActiv you can access up to a portion of your paycheck early per pay period, but you may have to pay a fee for the payday advance.
• Dave: Like Earnin, Dave offers early payday and cash advances up to $500 without a fee.

*Approval Odds are not a guarantee of approval. Credit Karma determines Approval Odds by comparing your credit profile to other Credit Karma members who were approved for the personal loan, or whether you meet certain criteria determined by the lender. Of course, there’s no such thing as a sure thing, but knowing your Approval Odds may help you narrow down your choices. For example, you may not be approved because you don’t meet the lender’s “ability to pay standard” after they verify your income and employment; or, you already have the maximum number of accounts with that specific lender.