Cash Advance Apps vs. Payday Loans: Which Is Better?

If asked to picture a payday lender, you might think of a storefront in a strip mall with green dollar signs and neon slogans like “everyday’s payday.” You probably don’t picture a mobile app that advertises on TikTok and sports a colorful logo.

But cash advance apps like Earnin and Dave provide advances with the same borrow-and-repay structure as payday lenders, and consumer advocates say they carry similar risks. Both are fast, no-credit-check options to bridge an income gap or ease the pressure of inflation.

Neither is an ideal first choice for borrowing fast cash, but knowing their differences can help you save money and avoid damaging your finances.

Cash advance apps work like payday loans

Like most payday loans, a cash or paycheck advance app lets you borrow money with no credit check. You’re also required to repay the advance, plus any fees you agreed to, on your next payday.

A single pay cycle is usually not enough time for borrowers to repay a payday loan, so many…

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This article was written by Annie Millerbernd and originally published on www.nerdwallet.com