From providing fee-free checking accounts to convenient banking, Chime has proven to be a fintech company that we can rely on when it comes to managing finances online
In fact, Chime just launched instant loans, a lending feature that stands out among many competitors and that appears to be even more convenient than the neobank's overdrafting feature (SpotMe) that allows users to borrow money from the platform.
In this guide, I'll tell you all you need to know about Chime instant loans, how you can actually qualify for them, together with what you should know about SpotMe.
What are Chime Instant Loans?
Chime instant loans is a relatively new lending feature on Chime that lets you access up to $500 that will be repaid in three-month installments.
And guess what? The interest here is fixed ($5 per $100 borrowed), unlike with other instant lenders that have variable fees.
You'll need to be a pre-approved Chime user who receives direct deposits regularly on your Chime checking account.
Think you've seen it all? No, you haven't because here is the best part—there's no credit check required, meaning anyone can qualify for the loan provided you meet the direct deposit requirement.
How to Get a Chime Instant Loan
The only straightforward route to getting an instant loan with Chime is by meeting the direct deposit requirement. It doesn't mean you need to receive direct deposit every day, no. If you set up your Chime account to receive direct deposit from your employer, even if it is once a month, then you should stand a chance of getting pre-approved.
I know there's no credit check with Chime instant loans, but repaying on time will see your credit score increase by 10-30 points.
What is Chime SpotMe?
SpotMe is a free service that allows Chime Checking Account members with an active debit card to perform certain transactions that might otherwise overdraw their accounts.
SpotMe can assist you if you need a little more cash to cover an expense.
You'll be able to overdraw your account by up to $20 once you're eligible for the feature and switch it on in your app.
Features of Chime SpotMe Loan
- You would receive a prepaid card that would allow you to access more authorized loans with more favorable terms.
- Applicants have the option of paying in 16 days or 3 months. The payback period is variable and can be shortened or lengthened depending on your needs.
- You can complete the entire application procedure online. After you've been approved for the loan, you'll have immediate access to the funds.
- You can also choose to pay off the debt earlier. There would be no charge for the penalty.
- The dashboard of your SpotMe online account also allows you to handle the majority of other services.
Eligibility Requirements to Get SpotMe and Borrow Money from Chime
To be eligible for SpotMe at the $20 base limit, you must have received at least $200 in a single direct deposit into your Chime Checking Account during the previous 34 days.
The deposit must be made via Automated Clearing House (ACH) from your employer, payroll provider, gig economy payer, or benefits payer, OR via Original Credit Transaction (OCT) from your gig economy payer, in order to qualify.
The following types of transactions will not qualify you for Chime SpotMe:
- ACH transfers
- Pay Anyone transfers
- Verification or trial deposits from financial institutions
- Peer-to-peer transfers from services like PayPal, Cash App, or Venmo
- Mobile check deposits
- Cash loans or deposits
- One-time direct deposits like tax refunds
If SpotMe becomes available to you and you have an active debit card, you can switch it on and agree to the terms and conditions under the app's Settings area.
You'll receive a notification alerting you that the functionality has been turned on in your app.
To keep using SpotMe, you must continue to receive qualifying direct deposits of at least $200 every 34 days.
How To Borrow Money From Chime
- Ascertain that you have met the basic eligibility requirements by getting a Chime Debit Card and making a qualifying deposit.
- To see if you're qualified for the SpotMe feature, go to the Settings tab in your Chime app (make sure you have the latest version of the Chime app).
- Accept the SpotMe Terms and Conditions to enroll in Chime SpotMe.
- It will show you the SpotMe limitation once it is activated. Up to this level, you can now use your Chime Debit card to make purchases that exceed your bank balance. You can get cash at an ATM or use a cashback transaction at a retail store like Walmart to get money through self-service check out at the POS machine.
Any money borrowed is deducted from your Chime SpotMe limit, and the available balance on the app is updated.
In your Chime Checking account, the amount borrowed appears as a negative balance.
How Much Can You Borrow From Chime?
You can borrow money up to the amount shown on your Chime Mobile App as your SpotMe Limit.
Chime sets this limit for you based on your account activities and history.
Nonetheless, SpotMe offers loans ranging from $20 to $ 200.
Because the amount you can borrow, i.e. the Chime Spo Me limit, is calculated automatically by algorithms, you have no control over it. However, there are some ways to increase your Chime SpotMe Limit.
Chime uses your direct deposit from your work to evaluate your eligibility and the amount that can be lent to you, so it has a lot riding on it.
However, you have a lengthy experience with Chime goods and have used them extensively.
You don't have a defined time frame for when your Chime SpotMe will rise. So this is one of the disadvantages of using the app to borrow money: you can only borrow up to the amount determined by the app.
Some Chime members have expressed dissatisfaction with the lack of progress in their limits.
However, Chime's strategy is to use its own processes to encourage prudent borrowing and reduce risk.
The Spot Me limit, on the other hand, may be reduced from time to time for reasons such as a non-consistent direct deposit, a reduction in direct deposit amount, or late repayments. It's all based on data.
One great feature with Chime Spot Me is the ability to send and receive a Spot Me boost from other Chime members every month, which can temporarily raise your Chime Spot Me limit by $5 per boost.
It helps to have friends who are Chime users exchange boosts, as it does not impact your own borrowing ability.
If the Chime Spot Me Limit does not give you comfort, you can check our post on other cash advance apps that work with Chime.
How Do You Repay The Money Borrowed From Chime
The ease and convenience of borrowing money from Chime is one of the main advantages.
You don't have to be concerned about repaying the money manually on time.
If you have a consistent stream of payroll direct deposits, everything is automatic.
So, when you receive a direct deposit or funds are deposited to your Chime Checking Account in any other way, whichever comes first, any amount borrowed through Spot Me (resulting in negative balances on your Chime bank account) will be automatically repaid before your balance is brought back to zero.
Take note of the Chime SpotMe terms, which state that if a Chime SpotMe negative balance is not repaid within 90 days of the initial balance, Chime may suspend your Chime Checking Account.
Chime will let you know what you need to do to prevent being suspended.
It is always preferable to pay dues via direct deposit during the same month so that your borrowing ability, i.e. Spot Me limit, is not negatively impacted.
Does Borrowing Money From Chime Affect Your Credit Score?
A credit check is not required to sign up for Chime SpotMe to borrow money.
If you read the Chime terms, you'll notice that they don't disclose failure to repay to credit reporting agencies.
This does not preclude them from taking legal action against you, but it does make you ineligible for future Chime SpotMe services.
Furthermore, if the advance is not repaid on the due date, neither Bancorp nor Chime will participate in debt collection actions, place the amount advanced as a debt with or sell it to a third party, or report any failure to repay to a consumer reporting agency.
So, in theory, it shouldn't affect your credit score, and it appears that Chime is on your side.
But do keep a tab on the terms from time to time as they can be changed in the future.
How Can You Use The Money Borrowed From Chime?
- Make everyday purchases with your Chime Debit Card, such as groceries and online shopping.
- Withdraw money from an ATM in the form of cash.
- Withdraw cash via a cash-back transaction at a retail store like Walmart, Walgreens, or other similar businesses.
What you cannot use Chime Spot Me for
- Payments to friends transfer
- Automatic bill payments using Direct Debit from the Chime Spending Account
- Transfers to other apps like Venmo and Cash App
- Chime Checkbook transactions
Final Thoughts
Chime Financial, Inc. is a financial technology company based in the United States that offers fee-free mobile banking services through The Bancorp Bank or Stride Bank, N.A. Account holders are given Visa debit or credit cards and have access to an online banking system via the company's website or mobile apps.
The majority of Chime's income comes from the collection of interchange fees.
Chime features SpotMe which is a feature present in Chime that lets its customers borrow money from the platform.
Eligible SpotMe users can borrow between $20 and $200 from Chime which will let them manage their different issues.
