Paycheque advance apps

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.

What is a pay advance app?

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.

How do pay advance apps work?

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.

How much can I borrow?

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.

How much does it cost to borrow?

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.

How do repayments work?

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.

Pros and cons of pay advance apps

Am I eligible to use a pay advance app?

Eligibility criteria vary between providers, but there are a few basic requirements you need to meet:

• Be gainfully employed
• Work regular hours
• Receive a consistent paycheque
• Have an operational chequing account
• Receive direct deposits

Some apps may also require you to work for a specific employer or make a minimum amount of money each month to qualify.

Will pay advance apps affect my credit?

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.

Alternatives to pay advance apps

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:

• Payday loans. Depending on what state you live in, you may be able to get a payday loan between $100 and $500. However, these usually come with APRs in the triple digits and loan terms of just a month. Compare lenders below.
• Installment loans. Looking for larger loan amounts or longer terms? Installment loans have more flexibility than payday loans, but often come with the same sky-high APRs.
• Auto title loans. Own your car? Auto title loans use your vehicle’s title as collateral, which means they’re often cheaper than payday loans. However, you risk losing your car to repossession if you default.
• Local programs and resources. Many local government agencies, nonprofits and charities offer free financial services and help with things like food or utilities for those in need.
  

Compare payday loans

Check the websites of any lenders you’re interested in to confirm they operate in your province or territory of residence.

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Name	Product	Max. Loan Amount	Serviced Provinces	Turnaround Time	Loan Term	Interest Rate
Cash Money Payday Loan		$1,500	British Columbia Nova Scotia Ontario Saskatchewan	In as little as 15 minutes with INTERAC e-Transfer® if approved	12-14 days (varies by province)	Varies by province	Apply for your first $300 payday loan at a $20 borrowing cost (excludes Saskatchewan applicants). Residents of Manitoba and New Brunswick cannot apply for a loan online (must apply in-store).	Go to site View details	Compare	loading Fetching your data...
iCASH Payday Loan		$1,500	Alberta British Columbia Manitoba New Brunswick Nova Scotia Ontario PEI	In as little as 2 minutes with INTERAC e-Transfer if approved.	14 - 62 days (varies by province)	Varies by province	Get up to 20% in cash back once your iCASH Payday Loan is fully repaid. Conditions apply.	Go to site View details	Compare	loading Fetching your data...
GoDay Payday Loan		$1,500	Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, PEI, Saskatchewan	In as little as 2 minutes with INTERAC e-Transfer if approved.	Up to 62 days	Varies by Province	To apply for a GoDay payday loan, you'll need to be a Canadian resident over the age of 18 with a valid email address, phone number and an open bank account with a Canadian bank or credit union.	Go to site View details	Compare	loading Fetching your data...

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Bottom line

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.

Frequently asked questions

• Why do pay advance apps ask for my bank account information?

  Pay advance apps require your bank account information so they can verify your incoming direct deposits, confirm your identity and have a place to send your advance.

• Are pay advance apps secure?

  In general, yes — though no app can ensure your information stays 100% safe. These pay advance apps do their part by encrypting any data you enter to protect it from hackers. Plus, they don’t store your bank account info on the app itself, which reduces the likelihood of your personal information being stolen.

• Why can't I borrow my full paycheque?

  In order to ensure you have money left over to live on — and that you can repay what you borrow — most pay advance apps set an upper limit on the amount you can borrow. This is generally a percentage of what you’ve earned or a set limit per pay period.