Paycheck Advance: How to Access Your Money Early

A paycheck advance can help bridge the gap between paydays when money is tight and you need cash fast. It’s a short-term loan agreement that allows you to access some of your earned wages before payday. These loans are typically small, with an average early paycheck request transaction of $106.¹

With a paycheck advance, you request part of your earnings early and repay the amount through payroll deductions. You may not have to pay interest or undergo a credit check to get a paycheck advance. You can request a paycheck advance from your employer or use a cash advance app. Some banks also offer early direct deposit, which lets you get your hands on your paycheck sooner.

Early pay requests are not the same as payday loans. A payday loan is a short-term loan from a third-party lender that typically comes with a high price tag – in fact, the APR can be 390% or more.² Because of the high interest charges and fees, payday loans can be considered a type of predatory lending that can trap borrowers in a cycle of debt.

How can you get paid early? Here are some of the best ways to get paid sooner.

Ask your employer for a payroll advance

The simplest way to get paid early is to ask your employer for a payroll advance.

Even if there’s no formal policy in place governing early paycheck requests, your employer may be willing to help you out if you’re going through a temporary financial hardship. Typically, the process works something like this:

• You submit a request for a payroll advance to your employer, which may require filling out a specific form.
• Your employer reviews the request and determines whether to approve it.
• If approved, you receive the advance and agree to repay it through payroll deductions.

Your employer may send the advance directly to your bank account through direct deposit or issue a paper check.

Am I eligible for a paycheck advance?

Eligibility for a paycheck advance varies by employer. It can depend on:

• How long you’ve worked for your employer
• Whether you have full-time or part-time status

Check with your HR or payroll department for answers if you’re not sure how payday advances work at your job or who qualifies.

How much of my paycheck can I get paid early?

Your employer can decide how much of your earnings are accessible before payday. The amount may be a percentage of your take-home pay, such as 50%, or a flat dollar amount.³

There may be limits not just on the amount, but also on how often you can take a payroll advance. Check your company policy to see if there are any such limits.

How do you pay back a paycheck advance?

Federal law allows employers to deduct advances from an employee’s paycheck. But there’s a limit – employers can’t deduct amounts from a single paycheck that would reduce your take-home pay below the federal minimum wage.³

Depending on the advance amount, you may have to agree to multiple payroll deductions to repay the loan. State laws may also impact the terms of any payroll advance agreements you establish with your employer.

Your employer isn’t your only option for a paycheck advance. Here are two other ways you may be able to access some of your earnings early.

1. Use a cash advance app

Cash advance apps are another way to get your paycheck early, and you can often apply right from your mobile phone. These apps often provide cash advances for free if you’re willing to wait a few days, or you can get an instant cash advance for a fee. It helps to shop around and compare:

• Paycheck advance minimum and maximum amounts
• Fees, if applicable
• Interest, if applicable
• Funding speed

You’ll typically connect your bank account information to the app so it can withdraw the advanced amount once your next paycheck hits. Make sure you’re using a trusted service before sharing this sensitive information.

With any short-term loan, read the fine print. Know how much you’re borrowing and how much you’ll repay if the loan includes interest and fees.

2. Set up early direct deposit

You can use an early direct deposit feature if your financial institution has one to access your pay sooner. Direct deposit allows you to receive your paycheck electronically. Tell your employer where to send it, and the money is deposited into your account.

When you enroll in direct deposit through Chime, you can receive your direct deposit up to two days early.⁴

Getting a paycheck advance could be a huge help if you live paycheck to paycheck and are short on cash. Here are some of the main benefits of early paycheck requests.

Avoid overdraft fees

If you spend more money than you have available in your account, some financial institutions might charge one or more overdraft fees. Those fees may cost $35 per transaction and can quickly add up.⁵

Payroll advances help you maintain a positive account balance and avoid those costly fees.

Gain financial flexibility

When the unexpected happens, knowing you can access funds when you need them is reassuring. If you don’t have an emergency fund, a paycheck advance could be the next best thing.

It’s not a loan – it’s your own hard-earned money. You’re just getting it a little early, before your actual payday.

Regain financial control

Living paycheck to paycheck can be discouraging, and it’s easy to feel like your money is running the show, not you. For example, you might be slipping into credit card debt if you rely on plastic to pay for things between paydays.

Taking a payroll advance can help you regain control and avoid new credit card debt.

Indirectly improve your credit score

A paycheck advance may not directly impact your credit since it’s not a traditional loan that gets reported to the credit bureaus. However, you could see some credit score improvement indirectly.

How? It’s simple. Payment history counts for 35% of your FICO credit score.⁶ Paycheck advances can give you the money you need to pay bills on time and avoid credit score dings.

When used responsibly, paycheck advances can be a helpful tool for managing your cash flow between paydays. Whether you ask your employer for a payroll advance, use a cash advance app, or set up early direct deposit, you have options.

To explore early direct deposit in more detail, learn how Chime’s Get Paid Early feature works.