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Earnin App 2019 Review: Get an Advance on Your Paycheck

April 16, 2019
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Earnin, formerly called Activehours, is an app that lets you draw small amounts of your earned wages before payday. Here’s what to know about the Earnin app, including how it works, what it costs and if it’s a good fit for you.

Earnin app at a glance

Withdrawal limit$100 to $500 per pay period.
Fees$0; optional "tip" up to $14.
Time to receive fundsSame day to next day.
Requirements
  • Hourly, salaried or on-demand job.
  • Get paid by direct deposit.
  • Provide access to the checking account to which your paycheck is directly deposited, and connect the account to receive your cash out.
  • Upload a timesheet or turn on location services to let the app know you went to work.
Clicking "Visit Earnin" will take you to Earnin's website to download its app.

» MORE: 19 ways to find fast cash

What is Earnin?

Earnin is part of a wave of companies that say they provide alternatives to expensive payday loans or racking up high overdraft fees. Companies such as PayActiv and TrueConnect offer similar products, but only through your employer.

A two-week pay cycle is hard on people who have to budget every penny, says Ram Palaniappan, CEO of California-based Earnin. “If they worked today, they should have access to their money today.”

Earnin says Starbucks, Instacart and Apple store employees are among the app’s users.

» SIGN UP: Keep your spending on track with NerdWallet. Sign up for free to see a single view of your finances.

Is the Earnin app right for me?

When used occasionally, Earnin is a useful app if you:

  • Are an on-demand worker whose paycheck varies.
  • Are an hourly or salaried employee who uses an electronic timesheet at work, or you work from a fixed location.
  • Have a checking account and are paid by direct deposit.
  • Don’t want to overdraw your bank account and pay an overdraft fee, typically $34.

Earnin might not be a good solution for you if you:

  • Are paid by reloadable debit card.
  • Work from home independently or have multiple employers.
  • Regularly spend more than you earn.

Consumer advocates warn that paying to get your earnings early is not a healthy long-term habit.

“It’s cheaper than a payday loan, but I fear that people get into the habit of spending their wages early and end up paying to access their wages on a regular basis,” says Lauren Saunders, associate director at the National Consumer Law Center.

» MORE: Quick ways to borrow money in an emergency

Earnin shouldn’t be used in place of an emergency fund, which can cover common financial shocks and help you avoid turning to apps like Earnin or payday loans. Saving $500 is a good start.

Maintaining a budget that includes money for everyday expenses, savings and something fun can also help you avoid living paycheck to paycheck. NerdWallet recommends using the 50/30/20 budget, which divides your money into needs, wants and savings.

What you should know about Earnin

How much earnin costs

The app doesn’t charge fees and, if you use it sparingly, can be cheaper than overdrawing your account or taking out a payday loan.

Users can donate a “tip” of any amount, but regular tips add up. A $2 tip on a $20 withdrawal due in two weeks is an annual percentage rate of 260%, comparable to the rates that payday lenders charge.

Financial privacy

Earnin requires your checking account information and, to know that you went to work, an electronic timesheet or your geographic location data.

The company says it uses bank account information not only to send you money but also to adjust its withdrawal limits and promote responsible financial behavior. For example, it scans your bank transactions to identify when recurring bills are due and when payday is, and may limit the amount you can withdraw if you have a bill coming due before payday.

The company says it stores information in an encrypted form and won’t debit your account for more than you authorize. Earnin can’t track nonrecurring expenses, though, so you’ll have to budget for costs such as doctor’s office copays.

Extra features

The app has an optional overdraft avoidance feature called Balance Shield. If you opt in, Earnin will send an amount up to $100 to your bank account when your balance drops below $100. The amount sent will count toward your daily and pay period limits. The feature provides a cushion if your account is in danger of being overdrawn.

Balance Shield is free for one-time usage. When setting up the feature, Earnin invites you to pay a tip when it’s triggered. If you don’t set a tip, Balance Shield will protect you only one time. Recurring use of Balance Shield requires a fee of at least $1.50.

Alternatively, you can sign up for Balance Shield Alerts, which sends push notifications when your balance falls below a specific amount.

1. Create a profile on the app and give it access to your checking account. Anyone can download Earnin, but to use it, you must receive your paycheck via direct deposit.

2. Earnin tracks the hours you work. It does this differently depending on your job.

  • Hourly workers: Upload photos of your daily timesheet or connect the app with your company’s online timesheet system
  • Salaried workers: The app uses location tracking on your phone to verify that you went to work
  • On-demand workers: Upload photos of your task receipts, such as a Postmates delivery confirmation or a Grubhub order. Earnin automatically uploads Uber ride receipts.

3. You can access money only once you’ve earned it.

4. When you request money, Earnin verifies your hours worked. The company says this takes about 10 minutes if you submit through the app.

5. You will receive the money the next business day if you request on a weekday, and on the second business day if you request over the weekend. There’s an option to get the money immediately, but only if your bank supports it.

6. You can pay a tip, usually between $0 and $14, which Earnin deducts from your paycheck on payday along with the money you had withdrawn.
Earnin has two withdrawal limits. The daily limit is $100 for all users. The pay period limit, or the total amount you can withdraw during your pay period, depends on how much you’re paid, any bills due and your financial behavior.

For example, the app encourages users to spend less than they make, avoid overdrafts and maintain a positive bank balance. All users start with a limit of $100. If your pay is high enough and your financial behavior meets Earnin’s guidelines, your limit can increase to $500.

 

 

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