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Although still new, pay advance apps are cornering the market on more affordable payday loan alternatives. You can get the money you’ve already made when you need it, and often at a much lower cost than payday loans. But most apps have strict eligibility criteria you’ll have to meet first.
Provided you’re currently employed and work steady hours, a pay advance app — also known as a cash advance app or paycheque advance app — may be able to advance you up to 50% of your paycheque. The time it takes varies by provider, though most can deposit your funds into your bank account in less than three business days. Most pay advance apps work off tipping or a small monthly membership fee, so you can stay worry-free from interest or other costs.
Branch and PayActiv are 2 pay advance apps that are currently available in Canada.
In general, pay advance apps work by downloading the app to your smartphone and following the directions to create an account. You typically need to enter your contact details, bank account numbers and information about your employment and when you’re paid.
From there, it may take a few days or even a couple months for the app to confirm your identity and direct deposits. It needs to make sure you have an established history of employment and pay. Once it does, you can navigate to its pay advance section and select and how much you’d like to borrow and submit your request.
It varies by provider, you can typically borrow a percentage of the money you’ve already earned. Some have a small maximum limit of just $75, while others may advance you up to $500 per pay period.
The total depends on the app and your hourly wage. Many are constantly doing the math for you and show you how much you have available at any given time so you can make an informed decision.
It depends on the app. Some charge a monthly membership fee that can range from $1 to $10, while others ask you to tip — though it’s usually optional. Some only charge a small flat fee like an ATM fee. And none of the apps listed below charge interest — a far cry from the costs of payday lenders.
Usually, the pay advance app automatically deducts your funds from your bank account on the due date — which is typically your pay day. So the money essentially comes off your paycheque once you actually receive it. If you don’t have enough in your account, many will hold off on withdrawing your payment to prevent you from entering overdraft.
However, you won’t be able to borrow again until you repay your current advance. And some apps may even ban you if this happens too frequently.
Some companies in the US, like Walmart and Comcast, have started partnering with pay advance apps to offer both wage advances and installment loans specifically to employees. These work similarly to pay advance apps for everyone, but instead it’s your employer that advances you money and deducts repayments from your future paycheques.
Eligibility criteria vary between providers, but there are a few basic requirements you need to meet:
Some apps may also require you to work for a specific employer or make a minimum amount of money each month to qualify.
In general, no. Most pay advance apps don’t check your credit history when you request an advance, nor will they report your on-time or missed payments to the major credit bureaus.
Pay advance apps are only one option when you’re looking for cash fast. If you need to borrow more than these apps offer, you might want to look into these alternatives:
Check the websites of any lenders you’re interested in to confirm they operate in your province or territory of residence.
| Province | Maximum allowable cost of borrowing |
|---|---|
| Alberta | $15 per $100 borrowed |
| British Columbia | $15 per $100 borrowed |
| Manitoba | $17 per $100 borrowed |
| New Brunswick | $15 per $100 borrowed |
| Newfoundland and Labrador | $21 per $100 borrowed |
| Northwest Territories, Nunavut & the Yukon | $60 per $100 borrowed |
| Nova Scotia | $19 per $100 borrowed |
| Ontario | $15 per $100 borrowed |
| Prince Edward Island | $25 per $100 borrowed |
| Quebec | Limit of 35% annual interest rate (AIR) |
| Saskatchewan | $17 per $100 borrowed |
If you need a few extra bucks or so to hold you over until your next paycheque, consider using a pay advance app. They usually don’t charge interest, so you’ll only be on the hook for a minimal membership fee or optional tip — if that. But you’ll need to be employed to qualify, and you’re limited to borrowing a percentage of the money you already earned.
Don’t have a regular source of income or need to borrow more? You might want to look into your payday loan options instead.
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