Many people use cash advance apps like Dave, but is this the right loan option for you? Unfortunately, 36% of all Americans do not have savings to fall back on during an emergency.1 When you need to borrow money, a lender could help you get instant cash to get back on your feet.
Learn more about apps like Dave, and what your alternatives are.
Finding the Right Personal Loan
Approximately a third of Americans have less than $100 in their savings account.2 If you need access to instant cash, consider taking out a personal loan. Personal loans are short to long-term installment loans that borrowers can use for a variety of costly expenses. Many people take out personal loans when they need loan proceeds to afford rent, car repairs, dental procedures, and more.
But while a personal loan is convenient for fast direct deposits, it’s important to learn about all of your loan options before applying with direct lenders or financial apps like Dave.
Types of Loans Available
Loans provide much-needed relief to consumers that are struggling financially. There are different loan options available, but which loan is right for you? Learn about some of the most common types of loans available below.
- Payday Loans — A payday loan is a type of cash advance that is typically repaid in one lump sum within two weeks. Approval is usually easy to get, but interest rates tend to be excessively high.
- Cash Advances — A cash advance is any type of small-dollar loan that provides money quickly. Credit card cash advances and payday loans are common cash advance loan options.
- Personal Loans — A personal loan is a small to large installment loan that a borrower can repay in monthly payments. Borrowers can use personal loans for almost any emergency.
- Credit Builder Loans — A credit builder loan is an installment loan meant to help people improve their creditworthiness. Credit builder loans work like traditional installment loans.
- Pawn Shop Loans — A pawn shop loan is a secured loan from a broker that requires collateral. The amount of money a borrower can get through a pawn shop loan depends on the value of the asset they secure the loan with.
Loans Like Dave: What You Need To Know
You may have started to see several apps like Dave out there. But what are they, and how do they work? Dave is a cash advance app that was created in 2017 as an alternative banking option. Dave’s headquarters are in Los Angeles, California, although the company provides various products, such as spending accounts and side hustles for customers across the country. Dave’s mission is to provide an affordable banking option to consumers.
Apps like Dave specialize in offering quick cash advances (ExtraCash) to eligible applicants. These cash advances are meant to help individuals avoid paying overdraft fees to their banks. Dave states on their official website that they have helped customers avoid $2.5 billion in overdraft fees.
In order to use Dave, consumers must pay a $1 monthly membership fee. Monthly fees renew automatically and allow Dave members access to their online accounts. Consumers can manage their memberships through their account settings.
What Products Can I Get?
Dave offers the following three products for their customers:
An ExtraCash™ advance is a cash advance loan that provides up to $500. This cash advance option does not require a credit check and does not come with late fees, although there may be a small service fee. The money can be received within 5 minutes through the cash advance app.
Dave customers with an Extra Cash account can opt-in for a Credit Builder service. This service allows borrowers to improve their FICO score by reporting monthly payment activities to the Equifax credit bureau.
A Dave Spending Account is a non-interest-bearing deposit account. This bank account works similarly to a checking account because consumers can hold deposits, make transfers, and make payments.
Customers with a Dave bank account can apply for a Dave Debit Mastercard to get up to 15% cashback. According to their official website, there are no overdraft fees or minimum balance fees. This type of bank account is FDIC-insured for up to $250,000 through the bank partner, Evolve Bank & Trust, Member FDIC.
Dave provides Side Hustle, a service that connects customers with side hustles. If a customer wants to increase their income, they can apply for a variety of jobs through the cash advance app. Side hustle workers could earn up to $37 hourly.
The hours and pay vary depending on the type of job a Dave customer does. However, Dave promotes flexible hours, job variety, and remote opportunities.
How Do They Work?
A cash advance through Dave provides up to $500. Eligible borrowers can link their existing bank account to the Dave app and overdraft their account up to $500 during an emergency.
Borrowers have as long as their next pay period to pay off the cash advance. If the app cannot detect a payday from bank access, then the borrower has until the nearest Friday. If the total cash advance amount cannot be repaid on time, then the cash advance app will automatically withdraw smaller partial settlements every day until the loan amount is paid.
Dave decides whether an applicant is eligible for cash advance loans by looking to see if they have the following:
- At least 3 recurring deposits in their spending account
- A consistent income history
- Reasonable spending patterns
- No outstanding balances
- A total deposit of $1,000 or more monthly (for a higher advance amount)
- A linked bank account must have a minimum 60-day history and a positive balance
What Is the Application Process Like?
The best cash advance apps provide funding quickly. Cash advance apps like Dave can provide loan proceeds within minutes, but you will have to follow these 4 steps:
- Sign Up — Applicants must sign up for a Dave account and apply for cash advances to see if they qualify.
- Loan Amount — After linking your bank account, a Dave agent will determine a loan amount based on how much you can comfortably repay.
- Spend — Eligible borrowers can transfer the cash advance amount to a Dave spending account instantly to use for various expenses. A borrower could also transfer small cash advances to a different debit card or checking account in 1 to 3 days. Expedited funds will require a small fee.
- Repayment — Borrowers have until their settlement date to pay off cash advances. If the full amount cannot be automatically deducted, then smaller withdrawals from their checking account will be made.
Interested consumers can find additional information and resources on Dave through the official website or by referencing the Better Business Bureau.
What To Know Before Applying on Cash Advance Apps
The target audience of Dave loans and other similar cash advances is people with low income. Individuals with insufficient cash in their bank accounts could benefit from loans similar to Dave’s. However, loans like these hurt borrowers through short repayment periods.
It’s important to read customer reviews before deciding to work with any lender. Dave currently has 4.8 stars on the Apple app store and 4.3 stars on the Google Play Store. The common consensus is that Dave is an easy-to-use app that provides a convenient cash advance service at the cost of a membership fee. However, most customers agree that the average cash advance limit is low, and Dave is an expensive option if you need a same-day direct deposit.
Pros and Cons of Cash Advance Apps
If you are considering using cash advance apps like Dave, it’s important to know the advantages and disadvantages before making a final financial decision. While many apps may boast “fast cash” or “easy approval” it’s important to make sure these apps are trustworthy.
|Immediate Access to Funds: Cash advance loans often provide instant or same-day access to funds, which can be crucial in an emergency.
|Fees: While some apps don’t charge interest, they may have membership fees, tip suggestions, or other costs.
|No Credit Check: Many cash advance apps don’t require a credit check, making them accessible to people with poor or no credit.
|Limited Amounts: Cash advance apps typically only offer small amounts of money, which may not cover larger expenses.
|Automated Repayment: These apps often automatically deduct repayments from your next paycheck, which can help ensure timely repayment.
|Dependency: Regular use of cash advance loans can lead to a cycle of dependency, where users rely on advances instead of improving their financial situation.
|Features: Many of these apps offer budgeting tools, overdraft predictions, and other helpful features.
|Banking Requirements: Some apps require users to have a checking account or a certain bank.
|Privacy: Cash advance apps are typically digital and offer a more private alternative to asking friends or family for money.
|Overdraft Risks: If the app automatically withdraws repayment and the user’s bank account is low, it could potentially lead to fees.
*Please note that the specifics can vary greatly from app to app, so it’s important to thoroughly research and understand the terms of any cash advance app before using it.
CreditNinja: How Does It Compare?
CreditNinja provides personal installment loans through an entirely online process. CreditNinja aims to help consumers get emergency direct deposits before their next pay period.
Keep reading to learn how we compare to other financing apps and why we continue to be one of the top online providers of installment loans.
How Does CreditNinja Stand Out?
Most cash advance apps like Dave provide less than a few hundred dollars through direct deposit. However, we provide a wide flexible range of loan amounts to meet almost any financial need. Customers can apply for a small or large amount to increase their bank account balance and quickly deal with an emergency.
The best cash advance apps provide sufficient time for repayment, but even then, they often have hidden fees and high-interest rates. We provide short and long-term repayment plans with transparent fees and rates.
Who Should Pick CreditNinja?
CreditNinja can be an ideal cash advance option for anyone that needs instant money. Our hassle-free online approval process makes it possible to get online loans without ID. All you need to do is submit basic information!
And unlike most cash advance loans, we do not charge a monthly fee or require a membership. We offer personal installment loans instead of cash advances, which allows us to offer more flexible repayment terms and higher loan amounts.
We work with a variety of financial backgrounds, so don’t feel discouraged if you have a low FICO score. At CreditNinja, we consider more than just your FICO score for approval.
How Will the Loan Process Work?
We offer a streamlined 3-step process for personal loan approval. Take a look at what you can expect.
- Apply — Complete the online application form with basic information on yourself and your financial needs.
- Approval — Find out if you qualify! If eligible, you will receive a personalized loan offer with the upfront amount, rate, and terms.
- Funding — After reviewing your loan offer and signing the loan agreement, you could get your money directly deposited the same day!*
Frequently Asked Questions About Loans Similar to Dave
What is the interest rate and APR on a Dave loan?
Cash advances from Dave have a 0% interest rate and APR. However, borrowers may have to pay a fee for specific types of transfers.
What happens if I default on a Dave loan?
Borrowers that default on their cash advances will have daily withdrawals taken from their linked checking account until the entire loan amount is paid back.
Can I prepay my Dave loan without any penalties?
Borrowers can repay their cash advances early at any time through their Dave account without paying a penalty fee.
How are my loan payments structured with a Dave loan?
A cash advance from Dave does not have a payment plan because the instant cash they borrow is due by the next payday. Dave reviews a borrower’s bank account to determine when they receive direct deposits from employment.
What is the total amount I will need to repay for a Dave loan?
Borrowers will have to repay the full cash advance amount and pay additional fees if they choose specific types of transfers. For example, fast funding fees range from $1.99 to $13.99.
What is the minimum credit score required to qualify for a Dave loan?
Dave does not require a credit check because there is no minimum FICO score requirement. Eligibility for a fast direct deposit loan depends on a borrower’s income and employment status.
A Summary From CreditNinja About Loans Similar to Dave
Cash advances and apps like Dave are convenient for instant cash, but many apps charge fees for same-day funding. Consumers should consider all of their financing options before accepting any type of loan offer from personal finance apps.
Pay attention to the terms and conditions to fully understand your financial responsibility.
If you want additional information on cash advances, money apps, or personal loans, check out our online personal finance blog.
*Applications approved before 10:30 a.m. CT Monday-Friday are generally funded the same business day. Applications approved after this time are generally funded the next business day. Some applications may require additional verification, in which case the loan, if approved, will be funded the business day after such additional verification is completed.
- Americans Do Not Have Enough Savings│Nasdaq
- Here’s How Much Americans Have in Their Savings Accounts in 2023│Yahoo
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