Cash advances and quick loans have experienced a staggering resurgence in the past year.
In particular, bankers and lenders have taken to a more modernized approach; online applications through the use of mobile applications.
“Dave” was the first application to pioneer the digital loan revolution. Offering up to $100 (which was originally limited to $75 on release), “Dave” charges no interest or fees quick loan, aside from the $1 monthly membership fee. Users enter the day they will receive their next paycheck and the balance of the loan will automatically be deducted. Loan recipients also have the option to day early, should they attain the means prior to the end of the 2 week cycle. Loans typically take 2-3 days to process, however loan recipients also have the option for an instant bank transfer at an additional cost.
Qualifications for loans is dependent on your bank standing. “Dave” (and many other quick loan applications, for that matter) request a link directly to your bank account.
Next is the process of verifying your status of employment. After entering your employer and location details, quick loan applications sift through your bank statements for deposits with both of those parameters, taking about 5 minutes. Verified loan applicants are able to select from multiple tiers of loan amounts, while unverified applicants are often considered high risk recipients who are subject to lower loan amounts.
After the success of the “Dave” application, many new applications also entered into the market.
Brigit, for example, is a $9.99 membership that allows you to receive $250 instantly. Earnin allows loans up to $100.00 a day, based on your employments’ establishments timekeeping system. Some applications even let you up to $2,000.00 – $2,500.00 such as PockBox and MoneyLion Plus. These applications actually implement APRs and are known to glance at applicants credit scores.
An influx of these services indicates some pretty harrowing information; there is a demand and a need. Advertisements for Dave and the like litter the screens of users of YouTube, SnapChat, Facebook, Twitter, and countless other websites. Advertisements use language that’s particularly targeted to low income university students. Phrases like “Are you a broke college kid like me?” and “Sometimes I need money for gas, so I can be able to go to and from work” begin to paint a dark picture.
According to Investopedia.com, “The National Association of Colleges and Employers (NACE) indicates that paid internships have a higher chance of leading to a paying job compared to the unpaid ones since most interns who had job offers accepted positions. Sixty percent held a paid internship compared to 37% of those who worked for an unpaid one. Unpaid internships also tend to provide trainees fewer skills compared to paid ones whose interns, 70% of them, found employment upon completion of their internships. A survey by the Institute on Education and the Economy at Columbia University’s Teachers College found that paid internships are stronger in all measures of internship quality compared to unpaid ones.”
In addition, CareerBuilder reported in 2017 that 78% of workers in America are living from paycheck to paycheck.
With economic circumstances such as these, it’s no wonder that Americans, both young and old, are finding themselves on the download link of the App Store.
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