Earnin is a paycheck app that allows you to borrow money without paying fees or interest (instead, it’s suggested that you leave a “tip”). The amount you borrow is deducted from your checking account when your next paycheck is deposited. While Earnin doesn’t technically offer personal loans, it’s a short-term solution for users who need small amounts of cash immediately and can comfortably repay what they borrow from their next check.
- APR Range Varies, depending on voluntary tip amount
- Recommended Minimum Credit Score No credit check required
- Loan Amounts Up to $1,000
- Loan Terms Repaid on your next payday
- Pros and Cons
- Company Overview
Choose your own "tip" amount
Can help prevent overdrafts
Can negotiate medical bills on your behalf
Offers cash-back rewards
No credit check required
Not an option for all consumers
Low maximum loan limits
May encourage poor financial habits
Tips can add up
- Optional tip: You can choose to leave a tip when you cash out.
Founded as Activehours by Ram Palaniappan in 2013, Earnin began as a startup in Silicon Valley. It’s raised $190 million in venture funding from big name investors like Andreessen Horowitz and Spark Capital. Earnin is used by employees at over 50,000 companies and hires more than 100 workers to support its service.
- No interest: While other personal loans often charge interest, Earnin does not. This means you don’t have to worry about qualifying for a low interest rate with a certain credit score likeyou might with a personal loan.
- Choose your own “tip” amount: Besides, charging interest, personal loans may charge a variety of fees for things like origination and prepayment, but Earnin does not. Instead, it gives you the option to leave a tip every time you use the app. You get to choose that amount, too, and it can be $0.
- Can help prevent overdrafts: If you sign up for Earnin’s Balance Shield feature, you’ll get an alert every time your checking account balance gets low, and can have an optional Cash Out up to $100 directed to the low account. While Balance Shield is free like the rest of the app, a minimum $1.50 tip is required to keep the Cash Out feature enabled once it’s already been used.
- Can negotiate medical bills on your behalf: Health Aid is an Earnin feature that can help negotiate your medical bills to a lower price. Once you upload a picture of a bill, an Earnin employee will reach out to the healthcare facility and negotiate payment for you.
- Offers cash-back rewards: You can enroll your credit or debit card in Earnin’s Cash Back Rewards program. By doing so, you may earn between 1% and 10% cash back at select restaurants and stores. Currently, the app is only compatible with Visa, Mastercard and American Express.
- No credit check required: Since Earnin doesn’t require a credit check, your credit score does not impact your eligibility to use its services.
- Not an option for all consumers: You can only use Earnin if you’ve set up direct deposit to a checking account through your employer. A consistent pay period is required as well. So if you’re a freelancer, contractor, or self-employed individual, the app may not work for you.
- Low maximum loan limits: When you first use the app, you’ll only be able to borrow up to $100. That limit could potentially increase to $1,000, but it depends on your situation, paycheck, and spending habits. Your limit could also decrease back to $100, for instance, if a debit transaction from your account fails.
- Privacy concerns: Once you sign up for the app, you’re required to share your bank account number and paycheck information. While this allows you to use Earnin, it may pose some privacy concerns.
- May encourage poor financial habits: If you use Earnin often, you may develop a habit of spending more than you can afford. That’s why you should use it sparingly and only borrow against your paycheck when absolutely necessary.
- Tips can add up: While tips may not seem like a big deal, they can add up quickly. This is particularly true when you consider them as an APR on the amount advanced. If you pay $5 to borrow $100, for example, and pay it back over a one week period, your APR is 261%.
Earnin Loan Rates & Terms
Earnin does not charge any interest, as the service earns money from optional tips. When you use it to draw from your upcoming paycheck, you can tip as much or as little as you’d like—that’s the fee you choose to pay, which can even be $0.
You can expect to get the cash you request in one to two business days. If you need money sooner, you can sign up for the Lightning Speed program, which allows users to transfer money in minutes, even on weekends or holidays. According to Earnin, most banks work with the Lightning Speed feature (except Fidelity Investments).
How Much Can You Borrow With Earnin?
With Earnin, you can potentially borrow up to a maximum of $1,000 if you’re invited to sign up for Earnin Express. However, to start, you can borrow up to $100 during your pay cycle. If you use the app repeatedly, Earnin may allow you to borrow up to $500, or invite you to use Earnin Express.
With Express, the maximum you can cash out is $1,000 or 80% of the amount of the paycheck you direct to Earnin. This feature requires that you set up and route your paycheck to an Earnin Express virtual bank account (through their bank partner Evolve Bank & Trust).
Your maximum loan amount is dynamic and re-evaluated each pay period—it has to do with your spending habits and whether or not you have a positive bank account balance.
Earnin Loan Fees
Earnin does not charge any origination, prepayment, or interest fees, so you can technically use the app for free. This is a great perk, as payday loans often come with high upfront fees. The no-fee nature of Earnin makes the app a cost-effective alternative to payday loans.
Tips are voluntary, but you will be presented with a default option that you can then change. There’s also an option to “pay it forward” by paying the tip for someone else. Keep in mind, tips can get expensive very quickly, especially when they’re considered as an APR on the advanced amount.
Payday loans often charge a fee per every $50 or $100 borrowed, or a percentage of the total loan. For example, a $100 payday loan from Check’nGo with a $15 finance charge has an APR of almost 400%. This is significantly more than the 261% “APR” you’d pay by tipping $5 with Earnin.
How to Use Earnin
To use Earnin, download the app on your Apple or Android device. Once you do, follow the directions to set up your account. You’ll be asked to enter your personal information as well as bank account, paycheck, and employer details (if you have more than one employer, you’ll have to choose just one to connect to the Earnin app).
It may take 48 to 72 hours for your account to be fully set up before you can request the funds you need to borrow.
If you periodically need some extra money before your next paycheck and meet the app’s eligibility requirements, Earnin may be a good option. It can help you meet your cash-flow needs without the costly rates and fees that come with payday loans. But tips can cost you a great deal of money. If you think of them as an APR, they may translate into sky-high rates.
And Earnin is not a long-term financing option, so if you use the app often, take a close look at your finances and figure out what you can do to improve them. Earnin’s low maximum loan limits mean you can’t use the app if you need to borrow thousands of dollars to cover an expensive emergency expense, such as a big medical bill or an automobile repair. If that’s the case, you may want to look for ways to increase your emergency savings or consider small personal loans from banks or credit unions.
We look at 40 data points from dozens of financial institutions to evaluate lenders for our personal loan reviews. Because a loan’s APR can dramatically impact the total cost you pay, we weigh that feature the heaviest. But since a great APR usually requires at least a good credit score, we also give points to lenders who may have a higher potential APR but offer loans to people with less-than-perfect credit scores.
Along those lines, we favor lenders who allow you to see if you prequalify before applying for a loan, so you won’t harm your credit score just by applying. Origination, prepayment, and late fees all get counted in our assessment. And lastly, we deduct points from the ratings of lenders with restricted access—for instance, those who require you to first have another type of account with them or to join a nonprofit organization.
Tech Crunch. “Earnin raises $125M to help workers track and cash out wages in real time.” Accessed April 2, 2021.
Federal Trade Commission Consumer Information. "Payday Loans." Accessed April 2, 2021.