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Cash App is an increasingly popular way to access cash, whether you need a loan for an emergency or want to get access to money quickly. The peer-to-peer money transfer service is used by more than 40 million people to send and receive funds securely and instantly.
As well as these services, the app also offers a borrowing feature. And while the app is an innovative and user-friendly way to manage your finances, the borrow option isn't available to everyone.
Our step-by-step guide will walk you through the process of borrowing money from Cash App, so you can get the cash you need in no time. We will cover everything from checking your eligibility, setting up a cash app account, and getting approved. So, let’s get started and learn how to borrow money from Cash App.
Step One: Check if You Are Eligible
To borrow money from Cash App, you must first check if you are eligible. The reasons for ambiguous eligibility are not explicit, but the general consensus is that the feature is still in its testing phase.
Other factors that can contribute to this decision are how often customers use the app and their state of residence.
To find out if you have the borrow feature, follow these steps:
- Open or download the Cash App.
- Tap on the bank symbol in the bottom left corner.
- Here, there should be a “Borrow” heading.
If you don't see the “Borrow” heading, then you can't borrow from Cash App at this time. Don't worry if you don't see it, as we said, the borrowing option is still in its testing phase, so you may not see it for various reasons, including residency or app usage.
If you do have the borrow feature, follow the steps below to borrow money safely from Cash App.
Step Two: Proceed With the Loan
Cash App offers a relatively simple borrowing process. The application is designed so that customers can access a short-term, $20 to $200 loan without any hassle.
To proceed with the borrowing feature, follow these steps:
- Click on the “Unlock” tab: This will show you how much you can borrow.
- Choose your loan: Select the amount you wish to borrow, then click “Next ”.
- Review the loan terms: Here you will see the repayment terms and loan fee.
- Choose your repayment option: Select a suitable repayment method and click “Next ”.
- Review the loan agreement: If you are happy to proceed, click “Borrow Instantly” and the money will be transferred to your Cash App account.
Cash App Terms and Payment Amount
If you intend to borrow money, you should always be aware of the specifics of the loan in order to make an educated decision about your financial situation. Comparing loan terms and payment amounts among different lenders will also help you choose a loan that best meets your financial needs.
When you understand the details of a loan, you can identify:
- The loan process
- Its timeline
- The amount of money you will have to pay back
- The total cost of the loan
- Any interest rates, fees, and other charges
Cash App Terms
For the Cash App loan, the repayment term is four weeks. The settlement method for Cash App is nicely flexible, allowing users to choose from three repayment options. This ensures that the loan repayment schedule fits into the user's budget and that the loan is paid off on time to avoid late payment fees.
Cash App users must agree to either of the following when borrowing money:
- Repay the balance in full
- Make a payment once every four weeks
- Repay the balance automatically, as you receive money in the Cash App
A grace period of one week extends the repayment period to five weeks. And if users are unable to make a payment by the due date, Cash App will charge a flat rate late fee of 1.25% to the balance and:
- Deduct the money from your Cash App balance
- Deduct the money from your linked bank account or credit card
Cash App won't charge you for repaying your debt early if you choose to do so. However, the fees will still apply to your balance.
Cash App Loan Amount
Combined with the applicable fees, the loan amount represents the total amount you are borrowing. Most loans come with origination, service, or prepayment fees.
With Cash App, users can borrow up to $200. And the charge for any amount borrowed is a flat rate 5% fee that is added to your owed balance. Essentially, this fee is equivalent to an APR of 60%.
In terms of comparison:
- Most personal loan APR rates come in at around 5.74% to 35.99%
- The typical APR for a payday loan can get as high as 664%
Understanding Credit Checks and Approval Criteria
When you apply to borrow money through Cash App, your credit score determines whether you are approved or not. Credit scores reflect your creditworthiness and determine your credit risk. Basically, the higher your credit score, the higher your chances of being approved for Cash App.
Cash App may also check your income, employment history, and other financial information.
If you meet all of Cash App's approval criteria, you will most likely be approved to borrow money. However, if you do not meet the criteria, Cash App can deny your application.
Credit Checks
When you apply to borrow money through Cash App, they will perform a hard search on your credit file. This means they will review your credit report and credit score to determine your eligibility for their services.
This can harm your credit score, and it can stay on your file for up to 12 months. It can also have a negative effect if you apply for other forms of credit in the meantime.
If you do decide to borrow money through Cash App, there are a few things you can do to minimize the impact on your credit score:
- Pay your bills on time. Cash App might report unpaid loans to the credit bureaus, and this can hurt your credit score.
- Keep your credit utilization low, as this can also affect your credit score.
When signing up for Cash App, you should understand how it will affect your credit score. Cash App may not be the best option if you already have a low credit score. If you have a good credit score and want an easy way to borrow a short-term loan, Cash App can be a great option.
Approval Criteria
You must be at least 18 years old and have a valid government-issued ID to borrow money through Cash App. You must also provide a valid email address, phone number, and residential address. Additionally, Cash App requires that you have a valid bank account.
To be eligible for the loan, customers must also:
- Have a verified Cash App account
- Not have a negative Cash App balance
- Be employed
- Have good credit
As long as you meet the credit and eligibility requirements, Cash App will review your application. If your application is accepted, you will receive a confirmation email and will be able to start borrowing from Cash App immediately- if the feature is available to you.
Pros and Cons of Borrowing Through Cash App
Convenience is the biggest advantage of Cash App borrowing. With just a few clicks, users can apply for a loan and receive the cash they need right away. This is especially helpful when you don't have the time to wait for a traditional loan to be approved.
Another great benefit is that the application process is quick and easy. All you need to do is provide your personal information, such as your name and address, and you're good to go.
The downside of borrowing through Cash App is that it can be expensive.
The interest rates and fees are typically higher than those of other loan sources and can add up quickly. Additionally, the loan amounts are limited to $200 or less, so if you need more money, you'll have to look elsewhere.
Is Cash App Safe to Use?
Cash App is backed by Block, Inc. (Square), a publicly-traded financial services company, that manages mobile payments. In addition, Cash App's deposits are FDIC-insured, which means they are protected up to $250,000.
In addition to its secure infrastructure, Cash App also has several features that enhance its security:
- Uses PCI Data Security technology to encrypt and detect fraud
- A two-factor authentication process requires a unique code sent to your mobile device before you can access your account
- To protect your funds, you can also log in with a PIN
- Account alerts can also be set up to notify you of suspicious activity
Cash App also allows you to freeze or deactivate your account if your device is lost or stolen. The Cash App also offers customer support Monday through Friday from 9:00 am to 7:00 pm EST, if you have any questions or need help.
Final Thoughts
Borrowing money from Cash App is an increasingly popular option for those in need of quick cash. Some Cash App users do not have access to the borrow feature, but those that do can borrow up to $200 in a lump sum with a fixed repayment schedule, and a transparent fee policy.
And while their fees are higher in comparison to traditional loans, they are much less expensive than payday loan options.
So before borrowing money from Cash App, consider the terms and conditions of the loan. Make sure you understand the repayment schedule and the interest rate you will be charged. It’s also important to make sure you can afford to repay the loan on time to prevent long-term financial problems.
