If you are currently living paycheck to paycheck, are an on-demand worker whose pay varies, or are faced with an unexpected financial emergency, you might need cash fast on occasion. Sometimes, paychecks simply don’t stretch as far as you’d hope or bills come in at unanticipated times.
Surprises like a car breaking down can wreak havoc on anyone who doesn’t have a large financial buffer, as well. When any of these situations occur, many turn to costly payday loans or get stuck over-drafting their accounts, which usually comes with high fees. Luckily, there is an alternative that can help: the Earnin app.
Earnin App: A Path to a Paycheck Advance
Earnin (formerly Activehours) is an app that allows employed individuals to get small advances on their paycheck. When you create an account, you provide a range of personal details. This includes your checking account information and details about your employment, including your pay schedule.
It can take a few days for your account to be approved. Earnin has to verify specific details, including your banking information and pay schedule. However, the company doesn’t contact your employer directly. Instead, it reviews certain data (like pay patterns in your provided bank account) to get a picture of your paycheck schedule.
Once all of the details are provided, and the account approved, you have to show Earnin that you are working. You have the option to send an electronic timesheet or use the Automagic Earning feature instead.
With that information, Earnin knows how much you make each day. Then, it gives you the ability to access that day’s pay, even if your paycheck is days or more away, through the cashing out process. The app also automatically estimates your payroll deductions, like taxes, to ensure you can’t receive more than you would probably get in your paycheck for your work hours.
It’s important to note that you have to be employed to use Earnin. The service doesn’t work with Social Security payments or other government benefits. However, it can work for Uber drivers, though you do have to connect your Uber account to the app to allow the Earnin App to monitor how much you make.
Cashing Out Through The Earnin App
When you cash out, you are receiving a paycheck advance from Earnin. You can tap on the “Cash Out” button in the app to start the process. There, it will show you how much is available, as well as whether you’ve hit your daily or pay period max.
If you are enrolled in “Lightning Speed,” a cash-out is sent to you instantly. It usually shows up in a matter of minutes, even if it’s a weekend or holiday.
Otherwise, it takes up to two business days for the deposit to go through. This partially depends on when you initiate the cash-out. If you start one before 9:30 am PST on a weekday, you might see your money by that evening. After that, the next business day or the day after is more likely.
Earnin a feature called Balance Shield that triggers cashouts. If the app detects that your available bank balance has fallen below $100, it sends money to that account automatically (up to $100, depending on your setting). It’s free to use that option once. However, after that, a tip of $1.50 is required each time. You can choose to get a Balance Shield Alert instead of an automatic cash-out if you want more control, however.
How Much You Can Cash Out with Earnin
How much you can cash out varies. Initially, you’ll be limited to $100 per pay period, suggesting you have the earnings to support that much. With a bit of time, it can increase, reaching as high as $500 if you use the app wisely, pay Earnin back without issue, and have that much in earnings available.
Your available earnings amount is determined by your timesheet information or the Automagic Earnings tool. During each pay period, as you work shifts, that amount in your available earnings rises. You can never cash out more than the app shows in your “Earnings” section, even if your limit is higher. This is because the Earnin App only advances pay for hours you’ve already worked.
When the pay period flips to the next one, your available earnings go back to zero. Then, they build up again as you work through the pay period.
Once you sign up, you can see your limits by going to the app’s home screen and tapping “Max Info.” Then, you’ll know how much more is available during a particular day or pay period.
How Much Earnin App Costs to Use
With the Earnin App, you get to choose how much you pay for the service. There are no fees or interest rates involved. Instead, you select an amount that you feel is fair and reasonable, allowing to you support the service. You even have the option to choose $0, giving you a choice that you won’t find virtually anywhere else.
Earnin relies on tips from the community to keep the service going. Along with paying for accessing your own money, you also have the ability to cover someone else’s cash out. The idea is that, by paying it forward, users can help other users who are in need. Then, when that person is able, they can do the same thing for someone else.
Paying Back Your Earnin Paycheck Advance
Earnin automatically handles paying back your paycheck advance. When your next payday rolls around, Earnin deducts what you owe (including any tip you pledged) from your bank account. You don’t have to worry about setting up or sending a payment; it happens all on its own.
Is It a Good Idea to Use Earnin?
If you are faced with a financial emergency and might get stuck with overdraft fees or feel like you have to turn to a payday loan, Earnin might be a better alternative. Even if you tip, you might pay far less to get access to your money than you would with payday loan interest or overdraft fees.
However, turning to it regularly to get your money early might not be wise, especially if you are paying Earnin a tip on a daily basis. It won’t help you develop good money habits, and could lead to poor financial behavior in the end.
On occasion, using Earnin is probably fine. But, if you keep having to turn to it, you might want to reexamine your budget and figure out how you can get back on track instead of relying on the service.
Payroll Advance Services Under Investigation
It’s important to note that payroll advance services (like Earnin) are being investigated by banking regulators. They are trying to determine if the companies are charging users illegal interest rates, masquerading those costs as membership fees or tips, which may be against the law. However, it isn’t clear whether those investigations will discover anything that impacts services like Earnin; it’s just possible.
Have you tried the Earnin App? Do you think the Earnin App is a smart alternative to loans? Share your thoughts in the comments below.