Earnin App Review – Is it a Better Alternative to Payday Loans?

Move over payday loans, a new app is giving borrowers a far more affordable option. While the Earnin app limits borrowing to small amounts, this is a good move to keep your debt from getting out of control.

Earnin App Review

I live in a fairly low-income urban neighborhood, and payday loan places abound. They’re everywhere because these types of loans target themselves towards the millions of Americans who live paycheck to paycheck. They’re just getting by, and a single disaster can make it impossible to pay that month’s rent.

Payday loans are a problem for many reasons. For instance, a study by the Consumer Financial Protection Bureau showed that most payday loan borrowers end up paying more in fees than they originally borrowed. You might borrow $375 to get your car fixed so you can get to work. But you could wind up paying more than double that by the time you get the loan paid back.

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And, of course, these loans create a dangerous cycle of borrowing to get out of trouble. But then you have to pay them back quickly, making your next payday even tighter. So they keep squeezing your paychecks until you can’t pay your bills and your payday loans.

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Of course, the long-term solution here is to get out of the paycheck-to-paycheck cycle. And believe me, I know that’s harder than it sounds. And while you work towards the goal of building an emergency fund, emergencies can still happen. And they can leave you in immediate need of cash.

What is Earnin?

That’s why companies like Earnin (formerly called Activehours) are coming up with creative alternatives to the payday loan. With this app, you can cash in on your hours worked before payday. But unlike a payday loan, which charges exorbitant fees every time you use one, Earnin doesn’t charge any fees.

Sound crazy? It kind of is. But it seems to be working for some people. Here’s how it works, caveats you should know about, and whether or not it’s right for you.

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How Does Earnin Work?

Basically, Earnin works on a pay-as-you-can model and is available for Android and iOS devices. You make a withdrawal of up to $100 per day based on the hours you actually worked. Then you pay a “tip” on top of the withdrawal–usually just a few bucks or up to about $15. That’s a steal compared to the fees and interest you’ll be charged on a traditional payday loan.

The catch is that you can only use Earnin if you’re a salaried, hourly, or on-demand employee. Freelancers, remote workers, and those with several jobs won’t find what they need here. You also have to receive your paycheck via direct deposit to use Earnin.

Earnin has to be able to track the hours you work. For hourly workers, you can upload a photo of your daily timesheet or connect the app to your company’s online timesheet system. If you’re salaried, you can turn on location tracking so that Earnin can verify you went to work that day. If you’re an on-demand worker, you can upload photos of your task receipts, or the app automatically uploads Uber ride receipts if you’re a driver.

When you need money, Earnin verifies the number of hours you’ve worked for that paycheck. You’ll get the money the next day if you request on a weekday or the second business day if you request on a weekend. A few banks even support immediate fulfillment from Earnin deposits.

On payday, Earnin deducts the amount from your paycheck. You can also add a tip, typically between $0 and $14, to that withdrawal.

What Are the Limits?

Of course, no one is going to let you borrow a whole paycheck’s worth of money before payday. And Earnin has its limits. All users can withdraw up to $100 in a single day. But individual users will have varying per-pay-period limits–between $100 and $500.

Your pay period withdrawal limit depends on your financial behavior, earning, and other factors. If you use the app well and earn good money, you can borrow more over time.

Balance Shield

If you struggle with keeping track of your bank accounts, you might accidentally overdraw them. This can lead to hefty fees. Earnin offers a Balance Shield feature meant to protect you from this. It can link up to your checking account. When the balance dips below $100, it will automatically send you a $100 Earnin loan.

The Balance Shield does operate based on your daily and pay period maximum borrowing levels and the available earnings you’ve added by tracking your hours. So if your pay period limit is $100 and you’ve already taken it, you might be out of luck. But this could be a useful feature if you don’t have money in savings or your bank doesn’t offer a similar feature.

Things You Should Know About Earnin

As with any financial product, Earnin does have is drawbacks. Here are some things to consider before you sign up for the app:

  • Borrowing Limits: The borrowing limits for Earnin are lower than with payday apps and some other fast borrowing options. This can be a problem if you’re in a pinch and need more than a couple hundred bucks to float you until payday.
  • Not Everyone Can Use It: Depending on the type of work you do and the way you get paid, you may not be able to use Earnin at all. That’s definitely something to consider before you sign up.
  • It Links to Your Account: Although Earnin uses hefty encryption to keep user data safe, it does store a lot of your data and connect to your bank account. That can be a little scary for some users, so be sure you understand what data they’re collecting and how they store it before you sign up.
  • Could Still Get Expensive: Even if you don’t tip every time you use Earnin, you’re still paying for access to your money when you do tip. And those dollars can add up more quickly than you’d think.

Still Better Than a PayDay Loan

Even with these caveats, if you can use Earnin, it’s probably going to work out better than a payday loan. That’s because there are no ongoing interest and fees, and you can pay what you deem reasonable when you take a withdrawal.

The only situation where this may not be true is if you need more than your maximum borrowing limits. In this case, you may need to look into a payday loan or another form of personal loan.

Need More Cash?

Do yourself a favor: Do your best to avoid having to rely on a service like this. They’re really a last resort. We want you to get into the habit of only spending what you can afford. Using a service like this is essentially borrowing against your next paycheck. It’s even worse than living paycheck to paycheck. Become financially healthy and break this cycle.

Related: 9 Apps That Loan You Money Now – Payday Loan Alternatives

If you’re really in a pinch and you need even more than Earnin can provide, consider a personal loan. One of our favorite partners is Lending Tree, which aggregates all the available loans that meet your financial requirements and gives you the best offers available.

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When To Use Earnin

So when should you consider using Earnin? If you’re just starting to work towards a goal of building up an emergency fund, Earnin can help you get there without decimating your fund when a minor emergency arises. It can help you if you forgot a bill that’s about to go past due–causing you fees and a ding on your credit score. Or if you’re close to overdrafting your checking account and have an automatic payment coming out, paying a $10 tip to Earnin looks a lot better than a $34 overdraft fee.

However, if you find yourself getting into the habit of using Earnin most pay periods, it’s time to reconsider your finances. You might want to look into where to get a side gig so you can earn more money. Or maybe look at our articles on paying down debt so you aren’t drowning in minimum payments. Or your situation might be simple enough to be solved by budgeting your money better.

Whatever steps you need to take, though, take them before you start using Earnin or any payday lending type solution on the regular.

Earnin App

Earnin App
9.6

Fees

9.5 /10

Features

9.5 /10

Mobile App

9.8 /10

Technology

9.5 /10

Ease of Use

9.5 /10

Pros

  • No ongoing interest and fees
  • Pay what you think is fair with the tip feature

Cons

  • The borrowing limits for Earnin are lower than with payday apps
  • Not available for freelancers, remote workers
  • "Tips" could add up to a big expense
Topics: Reviews

30 Responses to “Earnin App Review – Is it a Better Alternative to Payday Loans?”

  1. Jayden

    I have had a serious issue with the earnin app and their customer service team for about 2 months now. I keep getting one of two messages when I try and use the app which I have used multiple times in the past. I either get told they can’t log me in or to enter the 4 digit code sent to me by my bank. I have been emailing back and forth with the same lady regarding the issue and keep getting told it’s fixed when it’s not. This is a horrible app to use. They have my banking info yet I can’t use the app. I have done EVERYTHING they’ve asked me to do and I’ve gotten no where.

  2. Just a heads up, they give you an option to “tip” them. I have found out that if you don’t put a tip on there, they will essentially punish you by dropping you max cash out amount. I was actually told this by customer support. This should be included in the terms of service.

  3. Michael Lathrop

    I would be teaching my children about budgeting and saving. But…hey… instant gratification will be what this generation is known for and sadly it wont be their fault.

  4. I have used the earnin app twice and I think it’s a scam. I borrowed $100 and when my check went in the bank, earnin took out $109! Now I thought this was supposed to be a free service and you could pay them a tip if you wanted to? Well that is not true. They TOOK more from me than I even borrowed!

  5. Michael

    Wow! I am so glad that I took the time to read these comments. I definitely changed my mind in opening the app and set up an account. Commercials are awesome but that’s their intention. Thanks 😊

  6. from what it seems, they’re not an alternative to a payday loan, they ARE the payday loan, dressed differently and wearing glasses, so you can’t recognize them, its the devil in your phone and now you’ve given them access to your bank account!

    • Darren GalbraithI

      I personally thought I liked this app but I don’t work at the same location or have digital time sheets so they don’t track my hours and won’t let me borrow after they got they’re money back witch really screws me. They don’t explain this up front. I think they should be sewed for false advertising

  7. Marilyn

    I used to like this app a lot… back when they were known as “active hours.” I would rave it about to friends. It was super easy. You have to tip on each advance but it was cheaper than paying interest on a credit card. I really did like it… However, after a year or so it all went downhill horribly.
    1. The app and my bank continuously disconnect from each other. That’s actually been happening from the beginning, but it’s now more difficult to get it fixed again. It takes longer and quite a few attempts. I already didn’t feel comfortable giving my banking info. Having to re-enter it every few weeks didn’t make me feel any better about it.
    2. Poor service: You could always email them, but the people who use this app are usually in too much of a pinch to hurry up and wait for an email to be returned with troubleshooting instructions.
    They did recently come out with a chat feature, but the reps appear clueless, and use mostly auto responses assuming your problem is just like everyone else.
    3. Location services: For example, they have this new feature where they track your location to track your work hours. The idea behind it is that they will know when you’re working by watching you come and go from work. The rep assumed that I must have entered my work address wrong. She asked me for my home address, and my work address, and then home address again. They obviously didn’t consider folks such as myself who work remotely. My work and my home are the same place, and I told her that from the beginning. She asked me at least 3 times until I think it finally registered that they are one in the same. Her instruction was to just shut the location services off after 11 hours every day. For an app I use maybe 1-2 x a month if any… that’s a bit much. It used to be that you could just take a picture of your time sheet and you had an advance in your account within an hour. Now they want to watch where you’re going?
    4. Invasive: In order to use their “lightning speed” feature where money is in your account nearly instant, you must now give them your debit card number on top of the fact that they already have your routing and account #. Why in the world would that be necessary? That would mean that they have my workplace info, my debit card, my bank account info and my location at all times. That’s just scary and wholly unnecessary. It makes me lose all trust in an app I’ve been using for a long time now.
    So today I opened the app for the last time. It said it can’t connect to my bank and wants me to enter my banking info again, and reminded me to give them my debit card # too. That’s enough for me. I’d rather use my credit cards.

    • Stephanie

      Does the connection issue ever resolve? They took the 400 out of my account but now can’t connect to my bank for me to cash out. I really can’t afford going without the 400.

  8. I have been with Earnin since 2018. I have never had a bad experience with them. The money that I have gotten before a pay period was always paid back on my payday. They have never not once taken anything early or more than what they were supposed too. Really, you only use them if it’s necessary which happens from time to time. I like them and will continue to use them when I need too.

  9. The idea of Earnin is great. However, I DO NOT recommend using this app. The customer service is atrocious. You can only speak with someone through the app’s chat function. And the “reps” are less than knowledgeable. Also, they can erroneously withdraw funds before your payday. Happened to me. It was like pulling teeth to get them to cover my overdraft fees when they paid themselves back 12 days early.

  10. They are awful!! They randomly draft your payments a day early and cause you overdrafts they also don’t fix issues because everything is by email and they get back to you one to two days later and it’s like starting everything all over again every email awful

  11. Holly Hopkin

    STAY AWAY FROM THIS APP THEY ARE AWFUL!!!! THEY ARE ALMOST IMPOSSIBLE TO DEAL WITH.. THERE IS NO PHONE SO EVERYTHING IS OVER CHAT!!! THEY DEPOSIT MY MONEY INTO THE WRONG ACCOUNT AFTER I TOLD THEM IT WAS A CLOSED ACCOUNT AND MY BANK SENT THE MONEY BACK THEY ARE STILL TRYING TO TAKE MONEY FROM MY ACTIVE ACCOUNT

  12. I have been using the App for quite sometime now and it has really really really help me to get back on track. Recently I have been maxing out but I also have been making more money in order to pay it back and be OK. I appreciate this app because a lot of us aren’t able to ask someone to help us out when we are in a bind. Hope the information I’m giving is helpful to someone In need of some financial help.

  13. How can it possibly be a good thing to live beyond your means? If you make $400 a week and spend $500, you are lousy managing money.
    If you advance $100 out of that weekly paycheck, you are automatically shorting yourself for the next paycheck. And the cycle continues.

    • Clifton Taylor

      “If you make $400 a week and spend $500, you are lousy managing money.” Or you just had a unexpected expense. Things happen. This concept is great, you just have to know how to use it.

  14. I’ve used the Earnin app a couple of times (including today, which is payday). I will say that even though I do agree with this article in that Earnin is a much better alternative than a traditional payday loan which can AND will most likely keep you in an ongoing cycle of paying back and returning, I don’t care that Earnin adjusts the amount that you’re able to borrow. For instance: up until my last paycheck, I was able to borrow up to $150/paycheck, but then I received a notification from Earnin that my limit was decreasing to $100/paycheck, even though I didn’t make any less money, added a tip roughly 99% of the time when using the app and never went into the negative on my bank account (something else that determines the amount you’re limited to borrow which this article does NOT mention). In theory, this is a good resource to use if you just need $50-$100 to float you until your next check for say maybe groceries or a cheaper car fix AND you can afford to have that amount taken out of your next check, but that’s it. Don’t make it a habit because you may end up being able to get less money from the app as I mentioned it did to me and you’re somewhat screwed.

  15. Ashia Nowlin

    I signed up for this app and one of the first things I noticed was that although I sent Earnin my pay stub and I verified my pay date on the app, they still had me down as getting paid 2 days prior to my pay date. I really need to borrow some funds but I’m not willing to go into more debt in the process. Thanks so much for posting this. I really believe you’ve saved me some heart ache.

  16. This article is great and “in theory” the Earnin Ap is a wonderful concept. Having used it personally after going from being paid weekly to bi-weekly I was almost relieved. I’m someone who supports myself and have no roommate or other income to fall back on. I was elated to use it. I used it twice and am not here to bash it, however when Earnin took the money out automatically (as I knew it would and agreed to) it came out before my direct deposit did and I ended up over-drafted. I knew this was something new and contacted support, not even asking for my overdraft fee back but just to let them know so it wouldn’t happen again, I was asked to give proof of the transaction and supplied it, I was bereft when the email was passed to yet another rep who told me to send screenshots again. I was trying to see their point of view as I always try to, and know some people look for a free lunch which I wasn’t trying to do, just to make them aware and was told to contact my bank and have them provide the exact time my direct deposit came in. The screen shots showed them taking the money before the direct deposit (a full day) and showed the red overdraft fee and it was still not enough. I emailed them back and said I’d take the hit on the fees but would no longer be using Earnin. I still don’t think it’s a bad AP but they need to get the kinks worked out so consumers aren’t left in a worse place than they originally started.

    • Rosella

      Thanks to all of you for your posts. I was just about to open up an earn account but decided to read reviews first. SO GLAD I DID!! Totally lost interest. You all may very well have saved me from a lot of terrible heartache and overwhelming stress!!!!

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