Earnin 2021 app review: payday advance loans


Earnin is an app that allows you to withdraw small amounts of your earned wages before payday. This is part of a wave of payday advance companies who say they offer alternatives to expensive payday loans or accumulate high overdraft fees. Instead of charging interest, Earnin asks users to provide an optional tip for the service. Companies such as Dave and Brigit offer similar products.

The company claims that the app has over 10 million downloads and 2 million active users.

For some consumers, Earnin’s Cash Out Payday Advance is an option in an emergency, but it should not be used on a regular basis. When you add the tip, you are essentially paying someone else to access your income.

Is the Earnin app right for me?

When used occasionally, Earnin can be useful if you:

  • Have a small emergency expense.

  • Can use your next paycheck to cover money owed to the app in addition to other monthly expenses.

  • You are an hourly or salaried employee who uses an electronic timesheet at work.

  • Have a checking account and be paid by direct deposit.

  • You don’t want to overdraw your bank account and pay an overdraft fee, usually $ 35.

Earnin might not be right for you if you:

  • Regularly spend more than you earn.

  • Work independently or have multiple employers.

  • Are paid by rechargeable debit card.

Consumer advocates warn that paying to get your income early is not a healthy habit in the long run.

“It’s cheaper than a payday loan, but I’m afraid people get into the habit of spending their paychecks early and end up paying to access their paycheck regularly,” says Lauren Saunders, associate director at National Consumer Law Center.

Earnin’s payday advance feature should not be used in place of creating a emergency fund, which can cover common financial shocks.

A good first goal for an emergency fund is to accumulate $ 500, which is the maximum amount users can get from Earnin during a pay period.

Maintaining a budget that includes money for daily expenses, savings, and something fun can also help you avoid living from paycheck to paycheck. NerdWallet recommends using the Budget 50/30/20, which divides your money into needs, wants and savings.

See your money in one place

NerdWallet keeps track of your spending and shows you how much you spend on things like food, bills, travel and more. Plus, we’ll show you how to save big.

What you need to know about Earnin

Fees and rates

Earnin does not charge interest or fees.

Users can choose to “tip” any amount, but regular tips add up. A $ 2 tip on a $ 20 withdrawal due in two weeks is a annual percentage rate by 260%, comparable to the rates charged by payday lenders. The company caps tips at $ 14.

Winning disputes by using the APR to measure the cost of tips; However, APR is the best apple-to-apple comparison among all credit products and can help you decide if one option is fairly priced against the rest.

If you use it sparingly, Earnin can be cheaper than going overdrawn or taking out a payday loan.

The company claims that all users get the same level of service whether or not they tip.

Location and access to the bank account

To know you’ve gone to work, the company needs an electronic timesheet or uploaded photo of one. If you don’t have a timesheet, the company asks for your geographic location data.

Earnin also says he needs your checking account information, not only to send you money, but also to adjust his withdrawal limits and promote responsible financial behavior. For example, it scans your banking transactions to identify when recurring invoices are due and when is payday, and can limit the amount you can withdraw if you have an invoice due before payday.

The company claims that it stores the information in an encrypted form and will not charge your account more than what you allow. However, Earnin can’t track one-time expenses, so you’ll need to budget for costs like doctor’s office co-payments.

Additional features

The app has an overdraft notification feature called Balance Shield Alert that lets you know when your account balance drops below a specific amount.

If you opt for the Balance Shield Cash Out feature, Earnin will also send an amount of up to $ 100 to your bank account when your balance drops below $ 100. The amount sent will count towards your daily borrowing and pay period limits.

Balance Shield Cash Out is free for one time use. When setting up the feature, Earnin prompts you to pay a tip when it triggers. If you don’t tip, Balance Shield will only protect you once. Recurring use of Balance Shield Cash Out requires a fee of at least $ 1.50, but alerts are free.

The app also offers assistance in negotiating medical bills and finding payment plans through its Health Aid product. As with its payroll advance feature, the company says consumers can decide how much to pay for the service.

Consumers can use Earnin’s savings account feature, called WeWin, to build up savings or an emergency fund.

Payroll advance survey

In August 2019, the New York City Department of Financial Services announced an investigation into the payday advance industry, of which Earnin is a part. Banking regulators in 10 states and Puerto Rico are investigating whether payday loan companies are charging illegal interest rates disguised as tips or membership fees, a violation of national consumer protection laws.

How the Earnin app works in 6 steps

1. You create a profile on the application and give it access to your current account. Anyone can download Earnin, but to use it you must receive your paycheck by direct deposit.

2. Earnin tracks the hours you work. It does it differently depending on your job. Users who work from home can track their working hours as long as they submit a work email address to verify employment.

Salaried workers: The app uses location tracking on your phone to verify you’ve been to work.
Hourly workers: Upload photos of your daily timesheet, connect the app to your company’s online timesheet system, or use location tracking.
On-demand workers: Upload photos of your task receipts, such as a delivery confirmation from Postmates or a Grubhub order. Earnin automatically downloads Uber ride receipts.

3. You can only access the money once you have earned it.

4. When you ask for money, Earnin checks your hours worked. The company says it takes around 10 minutes if you submit through the app.

5. You will receive the money on the next working day if you request on a weekday, and on the second working day if you request on weekends. There is an option to get the money immediately, but only if your bank supports it.

6. You can pay a tip, usually between $ 0 and $ 14, which Earnin deducts from your paycheck on payday with the money you withdraw.

Earnin has two withdrawal limits. The daily limit is $ 100 for all users. The pay period limit, or the total amount you can withdraw during your pay period, depends on how much you get paid, bills due, and your financial behavior.

For example, the app encourages users to spend less than they earn, avoid overdrafts, and maintain a positive bank balance. All users start with a limit of $ 100. If your salary is high enough and your financial behavior is within Earnin’s guidelines, your limit may increase to $ 500.


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