Borrow Money Until Payday: Safe, Fast Options and Apps

When you need to borrow money until payday, you have five main options. These include using your emergency fund, paycheck advance apps, credit cards, bill extensions, and payday loans. Each option comes with different costs and speeds. Here’s how they compare:

Your emergency fund is the best first option when you need cash before payday – it typically costs you nothing and gives you immediate access to your own money.

If you don’t have an emergency fund yet, it’s never too late to start building one:

• Automate your savings: Many financial institutions let you round up each purchase and automatically save the difference. Chime^® offers this with the automatic savings feature when you use your Chime Visa^® Debit Card.¹
• Use high-yield accounts: A high-yield savings account helps your emergency fund grow faster between uses.
• Start small: Even $25 per paycheck adds up to a helpful cushion over time.

Remember, emergency funds are for true emergencies like unexpected bills or urgent repairs. Skip the dinner out and save that fund for when you really need it.

A paycheck advance app is a short-term cash advance that lets you access money you’ve already earned but haven’t been paid yet. Here’s what makes them different from traditional loans:

• No credit check: Most apps don’t check your credit score, making them accessible even with poor credit.
• Fast funding: You can receive funds the same day or the next business day after approval.
• Automatic repayment: The app automatically repays the advance from your next direct deposit, so you don’t have to remember due dates.
• Borrow only what you’ve earned: This helps you avoid getting in over your head, since you can only access wages you’ve already worked for.

How do paycheck advance apps work?

Paycheck advance apps are different from traditional loans. Here’s how they work:

• Sign up for an account with your chosen paycheck advance app.
• Link your bank account and work schedule to verify your income.
• Access a portion of the money you’ve already earned but haven’t been paid yet.
• Repay the loan automatically on your next payday.

How much can you access?

The amount you can get varies by app and your income, but it typically ranges from $25 to $750.

Most apps start you with a lower limit and increase it as you build a history of paying them back on time.

Costs and considerations

Many paycheck advance apps are low-cost, charging a small monthly fee or requesting an optional tip. One data study found that the average tip was $4.09.

Paycheck advance apps generally charge lower fees than traditional payday loans. Just remember to only borrow what you need since the money comes out of your next paycheck.

Credit cards are ideal for emergencies. If you’re facing an unexpected car repair or medical bill, you can typically pay it using a credit card. You can also earn cash back on qualifying purchases with your credit card.

However, it’s smart to exercise caution since credit cards typically carry an APR of 22.3% on balances, and relying too heavily on them can lead to high-interest debt.

Look for a credit card with a low APR or an introductory 0% APR offer, and pay off the balance by the due date to avoid interest charges.

Service providers may grant you an extension on your bills – especially if you’ve been a loyal customer. If you need to pay a utility or insurance bill but don’t have the money right now, just ask.

You might need to provide proof of employment to guarantee payment by the extended due date. Call your service provider directly to see what options they offer.

If you need cash immediately, you may be considering a paycheck loan. Also known as a payday loan, this product can seem tempting if you need funds to tide you over until your paycheck arrives. However, payday loans have several disadvantages:

• They can be expensive. A typical two-week payday loan can equate to an APR of almost 400%. You could pay $10 to $30 in borrowing fees for every $100 you borrow, and those costs add up quickly.
• You may get trapped in a cycle. Payday loans often have a repayment period of two to four weeks. If you can’t repay on time, you might take out a second loan to cover the first, creating a spiral of high-interest debt that’s hard to escape.
• The lender may require access to your bank account. When you apply for a payday loan, the company may require you to provide your bank account information. If they withdraw the repayment when you don’t have sufficient funds, your account could be overdrawn and incur additional fees.
• They can negatively affect your credit. If you default on a payday loan, the lender will likely report it to the credit bureaus, which can damage your credit score.
• The lender can sue you if you don’t repay the loan. Failure to repay a payday loan can result in the lender sending the debt to collections.

When you need money before payday, start with the options that cost you the least – your emergency fund or a bill extension. If those aren’t available, a paycheck advance app can help you bridge the gap without the high fees and debt traps of payday loans. Whatever you choose, you’re taking control of your finances by exploring safer alternatives.

For more ideas on generating funds quickly, check out our guide on ways to get fast cash today.