How to borrow money from Cash App? For situations, such as emergencies, where you need money instantly, this feature will certainly come in handy. While you can learn how to save money, there are still certain needs that might catch you off guard. Before you apply for a loan, though, it’s always best that you fully understand the process and what it entails. For that, here’s our complete guide on how the Cash App loan application works.
What is Cash App?
Square Cash App is a mobile app that provides money transfer services for its users. Through it, you would be able to easily send and accept funds instantly. It is no different from other apps such as Venmo and PayPal, but it has a few other functions that users can take advantage of as well.
Cash App will also provide you with a debit card and a bank account that you can access through any ATM machine. If you’re keen on growing your money, the app also enables users to invest in both Bitcoin and stocks, directly through the app. Some of these features can be accessed for free, while there are those you’ll have to pay a nominal fee for.
Signing up is also much easier when compared to opening a bank account. The app only needs your name, zip code, and mobile number or email address. You don’t even need to have an existing bank account or checking account to sign up. Note that you will need to verify your identity in order to fully access all of the app’s features. They will ask for your full name, date of birth, a valid U.S. mailing address, your Individual Taxpayer Identification Number or your Social Security Number, and your employment and income information. You’ll need to complete this step if you want to borrow money from Cash App.
What are Payday Loans?
Payday loans are short-term loans, which typically amount to $500 or less. It is considered short-term because, unlike regular loans, your due date for repayment falls on your next payday. These are much more accessible to most people and are sometimes available through smaller establishments, such as storefront lenders, and even through apps.
While this sounds like a good alternative, especially when you need emergency funds, it is important to note that payday loans come with very high-interest rates. These loans can come with fees of around $10 (or more) for every $100 you borrow. The average two-week payday loan also comes with an annual percentage rate (APR) that’s close to 400%. When you compare that with credit card APRs, which are typically around 12% to 30%, you can see why taking out payday loans can be risky.
Can you repay payday loans in installments? Yes, some states do allow lenders to extend a “rollover” contract with a client. This means you’ll only have to pay the fees that are due and your payment period gets an extension. However, this also means you’ll end up paying more and staying in debt for longer. This is an important thing to consider before you apply for a payday loan.
How to Borrow Money from Cash App
One thing you must remember about the Cash App loan application is that not everyone has access to it. If the feature is available for your account, however, here’s how to borrow money from Cash App.
Cash App Loan Application
- Open the app then click on your cash app balance. If you currently do not have any balance left, this would look like a house icon.
- After clicking, you will be taken to the Banking section. Look for “Borrow up to”, which is marked with a blue arrow icon. If you can’t find this option, you don’t have access to this feature yet.
- For those who have the borrow feature, click on “Unlock”. Cash App would then show you the amount you can borrow. This depends on the regular deposits you make through the app. The amount should be anywhere from $20 to $200.
- Read the Borrow Loan Agreement carefully before you decide. Once you’re sure about taking the loan, click on accept and this should start the process.
- Make sure that you provide the right details so that your application is processed smoothly. You might have trouble reapplying later if you provide false information the first time.
Remember, if you have an existing loan, you wouldn’t be able to get another one until you finish paying off the first.
Making Loan Payments on Cash App
When it comes to making loan payments, you do have three options to choose from.
- Automatic Payment. You can enroll in auto payments during the loan application process. Options include paying the lump sum on the due date or voluntary repayments. You can contact Cash App customer service if you want to opt out of your automated payments at any given time, which makes it very convenient.
- Manual Electronic Payments. If you have a debit card, you can schedule your repayments through it. To make sure you’re able to keep track, you can require authorization from your side before the card is debited for the amount you want to pay.
- Payment by Mail. Don’t have a debit card? No problem. You can mail Checks payable to Cash Lending to the address specified on their Loan Agreement For this, you will need to provide details such as your Cashtag, the amount you borrowed, and the date it was borrowed.
Cash App Interest Rates and Other Costs
Now that you know more about how to borrow money from Cash App, another thing you should consider is the cost of doing so. As with any loan, you should be mindful of any fees and interest rates associated with your loan. You would want to avoid overpaying or getting into more debt by accident.
For a Cash App loan, it will cost you 5% of the total balance immediately. You will be given four weeks to completely pay off your dues, which is followed by a one-week grace period before they start charging you the 1.25% interest rate. You will be charged this interest on top of the amount you need to pay each week if you’re unable to pay off your loan in time.
How does it compare to other types of loans, such as payday loans, personal loans, and title loans? The costs are certainly lower on Cash App, but you can only borrow up to $200. This is very limiting, especially if you need more than that. There are other cash advance apps available, but they aren’t as reasonable and some require a monthly membership fee for you to access the loan feature.
Aside from knowing how to borrow money from Cash App, do understand that it is mostly meant for emergencies or making sure ends meet before your next paycheck. Don’t rely on it for business capital or other big-ticket investments. For those, you will be better off with a personal loan.
Why Can’t I Borrow Money from Cash App?
Are you unable to borrow money from Cash App? If this is the case, there might be a few reasons why this is happening. One of which is that you already have an existing Cash App loan that hasn’t been completely paid off yet. You will not be able to take out a new one unless you’re finished paying. Unlike other loan apps that allow you to roll over any remaining balance (for which you will be charged more fees), Cash App requires you to complete payment before starting a new loan application.
If you have no existing loans and have made regular deposits on the app, but still cannot access this feature then consider calling the Cash App customer service. There is a chance that your credit score or credit history is keeping them from extending this option to you. Their customer service should be able to perform a credit check and assess if you’re a good fit for this feature.
Pros and Cons of Borrowing Money from Cash App
If you’re still having trouble deciding if this is the right option for you, weigh the pros and cons before you make a move.
- Learning how to borrow money from Cash App is much easier compared to getting a traditional loan. There are also fewer requirements to submit.
- The fees and interest rates also tend to be lower when compared to borrowing money using your credit cards.
- A great option to get cash now, especially during emergencies or if your monthly pay is delayed.
- You can only borrow $200 from Cash App max and only if you meet their minimum number of deposits on your account.
- To gain access to the borrow money feature, you’ll have to make regular deposits of $1,000.
- Short repayment time. Your due date is four weeks from when you took out the loan, which isn’t a lot of time especially if you’re really short on cash.
If you have access to the borrowed money instantly feature on the app, it can be a great alternative to your usual payday loan. However, if you’re unsure when you’ll next be getting paid then using this option might actually leave you in debt. So before you apply, consider your financial standing and calculate your gross income to make sure you can pay off the loan within the provided period.
Knowing How to Borrow Money from Cash App is a Convenient Alternative to Banks
Traditionally, if you need to borrow money, there are many steps that you need to follow. There are also a higher number of requirements, which not everyone would be able to meet. By knowing how to borrow money from Cash App, you’ll be able to get cash now without going through all that hassle. Of course, there are always pros and cons to consider. Make sure you do your research well so you can be certain that this is the best loan option for you.
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