Apps That Let You Borrow Money: What To Know
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College life comes at you fast. You never know when you might need to make a large unexpected purchase or find yourself short on needed cash. Sure, some students can call home and borrow from the 'rents, but that's not an option for everyone.
Good news! Nowadays, there are apps and websites that let you borrow money in a pinch. This is especially helpful for students who may be strapped for cash while in school. A borrowing money app functions like a personal loan and comes in handy when you're down on your financial luck.
In this article, we'll do a deep dive into apps that loan you money and everything a student needs to know.
What is a “money borrow” app?
A money borrow app is an application on your phone that offers almost instant access to needed funding. An app that lets you borrow money may sound like magic, but it functions similarly to a personal loan. This means some requirements can disqualify college students based on credit history or income requirements (gross, we don't like it either).
However–unlike many payday loans or cash advance apps that borrow money from your next paycheck–a borrow money app typically has decent terms and acts like a direct deposit into your existing checking account.
Still interested? Here are some hot tips before downloading a money borrow app:
- Make sure your phone is secure: Before keeping any financial information on your phone, you should set up a password that only you know.
- Gather all your financial information: Most info you should already know, but we understand that students may not have their SSN memorized yet. Time to call whichever family member has that since some lenders will require it.
A borrow money app feels like an instant cash advance but without dealing with sneaky payday lenders. Money borrow apps have some great benefits, but knowing how they work is necessary to take full advantage of them.
How do money loan apps work?
So, say you need cash for a planned trip, an indulgence, or an unexpected expense; you absolutely can get the funds you need from a typical loan.
For these standard loans, you'll need to head into one of your local banks or credit unions and apply, or you can usually apply online.
Banks may require you to have a checking or savings account with them to apply for a loan, and their processing may take several business days, forcing you to wait past your next pay period for funds.
But you can avoid the drain of a local bank visit by using a money-borrowing app instead! The process is typically as simple as:
- Download the app of your choice
- Review requirements
- Apply (usually requiring a credit check)
- Receive funds
- Start repayment
These apps are similar to banks and loaning institutions, but the process is much more convenient. You can apply for funding on a money app while walking between classes; it's that easy!
Like banks, these money-borrow apps all differ. For example, loan apps like Possible require that funding gets repaid in four installments or less. Money-borrowing apps like Dave may allow borrowers to benefit from no late fees, but these apps may not allow as much funding.
Some cash app borrowing services like Brigit and Earnin even have subscription fees that you’ll have to keep careful track of.
It's pretty important to do your research on these apps and have a decent personal finance education. We know students get burnt out doing tons of academic research, so we'll help get you started and get your money fast!
What to consider when choosing a money loan app
Let's start from the top. What expense are you coming up against, and would a money-borrow app for quick cash be the best, most convenient solution? If yes, then follow these tips when comparing the best apps for short-term loans:
- How much do you need to borrow – There's a big difference between $350 and $1,000+. Borrowing from more than one app is not advisable, so choose carefully.
- Consider the fees – Fees vary a lot between apps, and some shady companies use 'hidden fees.' This information should always be in their written policy, but you may have to search for it. Think of this as the world's most boring (and vital) scavenger hunt! Tip: If there’s an annual percentage rate, make sure you calculate it in your repayment.
- Calculate interest rates – Most of the time, your interest rate will be shown in the app when you apply. This gives you a good transparent look at what you’ll be paying back over time.
- Look at the repayment terms – How many payments can you make? How long can you repay the loan? Are there late fees, overdraft fees, or overdraft protection? Take all this information in and decide if your side hustle is enough to repay the money borrow app.
- Read the reviews – You'd never sign up for a class without checking RateMyProfessors.com, right? These apps are the same, and reviews can offer useful information. Always read the reviews!
Here's a hot tip: some loan apps will change their interest, repayment, and loan amount after you're approved. This is because they need to verify your quality as a borrower. Use budgeting tools to determine how much variable repayment you can handle.
College students may have no or bad credit and a limited financial history, making them stereotypically low-quality borrowers. For this reason, choosing an app like the Kora app that caters to students and offers flexible terms is ideal.
Are money loan apps safe?
You don't want to jeopardize your financial future, and we don't either. So here's all you need to know about the security and safety of money loan apps.
These apps often require users to provide or submit to the following:
- Personal financial information
- A bank account to connect to
- Possibly a Social Security Number
- Possibly a credit check*
These eligibility requirements may disqualify you from some apps or make you a little uncomfortable. We get it! Remember though, many lending institutions require this kind of information.
While many loan apps are safe to use, it's important to read online reviews and choose a reputable app that takes security seriously.
*Remember, too many credit checks can negatively affect your credit score. Only apply to one app if possible!
Need some extra cash? Kora can help
From how they work to whether they're safe, now you know all about money-borrow apps! But choosing the right one to boost your account balance can still be pretty overwhelming.
We have a solution. KoraCash is an excellent option for a personal loan for students. KoraCash is perfect when students need to make a more significant purchase or have an emergency. Life comes at you fast, and Kora is here to back you up. Here's how it works:
- Download our app
- Apply (you must be over 18, a current/recent college student, live in an eligible state, and have an SSN)
- Get up to $3,000
- Make flexible payments when you want
One of the best parts of KoraCash is that it may help build credit history as you repay the loan. You contribute to growing good credit history without a credit card while getting access to needed funds. It's the best of both worlds!
Learn more about Kora and get started on your money app journey with a company built for college students.
