Earnin App Review: A Legit Payday Loan Alternative?
Adulting can be hard. Between filing our taxes by April 15 each year, balancing our budget and having enough to pay the bills, it can seem daunting.
Sure, it’s great to be able to be paid twice a month (or however often you get your paycheck). However, it’s possible to get caught off guard (hello, life!) and end up with more days than money to cover needed expenses before payday rolls around again.
The good news is there’s no need to resort to predatory payday loans which charge an insane amount of interest to borrow a little bit of money. Earnin (formerly Activehours) is one such alternative. This app helps you by offering an advance of sorts so you don’t have to scramble while waiting for payday.
What is Earnin?
Similar to a traditional payday loan company, Earnin is an app that allows you to use your upcoming paycheck as collateral. You’ll typically receive the amount desired on the same day and Earnin will deduct what you borrow from your checking account when your next paycheck arrives.
Started in 2014, Earnin has worked with employees from over 25,000 companies including Starbucks, Apple and Whole Foods. Both salaried and hourly workers can use the Earnin app.
How Does it Work?
Earnin is only accessible on an app. Once you sign up, you’ll need to set up direct deposit through your employer to a checking account. Plus, you’re also required to have a consistent pay period and use online timesheets to track your hours or work at the same location every day. Both salaried and hourly workers qualify. If you’re what’s considered an on-demand worker–think Uber drivers and Taskrabbit workers–you’ll need to upload photos of your task receipts to qualify.
You will need to make at least $4 an hour–this is after taxes and any deductions from your paycheck–and doesn’t include Supplemental Social Security Income, disability and unemployment payments.
Other information you’ll need to provide include your name, phone number and email address. Once you’ve set up your account, you can borrow up to $100 the first time you use Earnin. You can only borrow money for what you’ve earned. The app will need to verify the hours you’ve worked before it’ll lend you money.
Once your request is approved, you’ll typically receive the money if you made the request on a weekday or on the second business day if it’s over a holiday or weekend. You may be able to get the money immediately but you’ll need to link your debit card and only if it’s supported by your bank.
There is an option to pay a tip–anywhere from $0 to $14–and Earnin will deduct it from your paycheck along with the money you borrowed when your payday comes around.
Afterwards, if you keep using Earnin you’ll need to be aware of their withdrawal limits. There’s a daily withdrawal limit of $100 for all users. The pay period limit will differ depending on the user. This is the total amount you can take out during your pay period and can be up to $500, based on your spending habits, how much you get paid and whether your employer works with Earnin directly.
Is it a Scam or Legit?
Earnin is a legit app. It seems strange that you can use their services for free, but the company earns money through other means. Plus, if you choose to tip when you get an advance, the idea is that your money is paying it forward for those who may not afford the service otherwise.
Customer Service
Earnin offers a few ways to contact their support team. You can email them at support@earnin.com or by messaging them in your app 24/7. The company says they will typically get back to you within a day.
The company has also been accredited by the Better Business Bureau (BBB) since June 2019 and has an A rating. It’s also received an average of 4-stars out of 315 customer reviews on the site.
Fees
There is no fee to download the Earnin app. Plus, there are no monthly or initiation fees to join, nor any mandatory fees to even partake in their service. Users do have an option to pay (or tip) up to $14 for each transaction.
Even though it’s optional, tipping regularly means that you’ll get access to Balance Shield. This special feature helps you from incurring overdraft fees. Here’s how it works: Earnin will deposit $100 automatically into your bank account when it goes lower than $100. This amount will count towards your pay period and daily limits.
The idea is to provide a buffer in case you’re at risk of overdrawing from your account. So if you don’t tip regularly, this feature will only turn on once. You can set up the feature and Earnin will ask you if you want to tip when Balance Shield is triggered. If you do, then you’ll need to tip at least $1.50 each time. Otherwise, sign up for Balance Shield Alerts which sends you a notification when your balance goes down to less than a predetermined amount.
Alternatives to Earnin
- Empower – This app offers up to $250 Cash Advance^ with no interest, no late fees, and no risk to your credit. With the Empower Card, you can also get paid up to 2 days earlier* and earn up to 10% cashback.** Empower also helps you gain control of your finances with an Automatic Savings function. Just set your savings target, and the app evaluates your income and expenses around the clock to detect when you have excess cash on hand and can afford to save. Plus, get recommendations on how to enhance your savings and be more efficient with your money. The app charges a monthly fee of $8 but also offers a 14-day free trial so you can try it before you buy it.Empower is a financial technology company, not a bank. Banking services provided by nbkc bank, Member FDIC.
^ Eligibility requirements apply.
* Timing may vary by employer.
** Deals will vary and must be selected in the app. - Prosper – This personal loan company offers loans starting from $2,000 with competitive interest rates in case you’re looking to borrow more than what Earnin offers.
- Dave – Cheaper than Earnin, Dave only charges a $1 monthly membership fee with the option to tip. You can get up to $100 but it can take up to three days to get your money or else you can pay $4.99 to receive it within eight hours.
- Even – This is a budgeting app that offers a free advance on your paycheck. The monthly $2.99 fee also includes alerts about upcoming bills and help you set aside savings by rounding up your purchases.
Should You Use Earnin?
Earnin isn’t for everyone. However, it’s fine if you use it occasionally for a small emergency expense and are able to use the next pay period to cover the cash in addition to your other monthly obligations. It’s also best for those who don’t want to overdraw on their bank account, since that can come with hefty overdraft fees from their bank.
However, if you spend more than you earn on a regular basis or have a huge financial need, Earnin might not be for you. In this case, you may be better off with a personal loan. In addition, you’ll want to work towards building a more realistic budget or find some way to make at least what you spend, or else you’ll find yourself in a financial hole for years to come.
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