As you probably already know, Venmo is a mobile app that allows you to make online payments easy and fast. In the last few years, most people decided to do most of their banking online, including getting loans. So, can you borrow money from Venmo? This article will greatly help you figure out whether this option is possible and how you can use it.
Venmo does have a borrowing option, and it allows certain loans for its users. As a verified Venmo user, you are allowed to apply for a loan of up to $5,000, and you can apply up to 24 times a year. However, keep in mind that these loans come with certain interest rates, charges, and penalties for late payments.
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Venmo Allows Its Users to Borrow Money Through Their App
If you are already using the Venmo app, you are probably familiar with its many options. This digital wallet allows you to make mobile payments, send money and make transactions with other accounts easy and fast. Many people enjoy using it as it allows them to leave their wallets at home and not worry about carrying cash and cards with them all the time.
Besides processing debit and credit card transactions, making instant transfers, and keeping track of your funds, it also allows you to borrow money. In case you run short on money at the end of the month or need to cover some unexpected expenses, Venmo loans can be a great way to secure you financially and help you manage your money more easily.
Venmo Offers Loans for Business and Personal Purposes
Venmo loans can be used in different ways and for various purposes. They officially offer loans for business and personal use. You can create a business account and get business loans so you can easily monitor your fund transactions and keep track of the growth of your business. These loans are probably one of the easiest ways to avail credit for your business ideas. If you do not own a business, you can also get loans for personal use. You can safely transact funds from your account and monitor them at all times.
Borrowing loans from the Venmo app is pretty easy, but the first step you have to take is verifying your account. This can be done in a few easy steps and will take only a few minutes. Once you launch your app, go to the settings and the “identity verification” option and click on the “one-time security check.” Once you do this, the app will ask you to answer some simple questions related to your personal information, which are necessary for verifying your identity and your account.
Who Is Eligible to Get Verified on the Venmo App?
In order to verify your Venmo account and be eligible for obtaining loans, you do have to fulfill certain requirements. If you are interested in becoming a user of Venmo loans, ensure you fulfill these next few requirements:
- Since there is an age limit on Venmo, you need to be at least 18 years old in order to get a loan,
- You must be a citizen of the United States,
- You must have a personal cell phone,
- Your Venmo account must be updated to its latest version in order to get loans.
How Much Money Can You Borrow From the Venmo App?
The amount of money you can borrow from Venmo depends on whether you have a verified account. If you are unverified, you can apply for a maximum of $50 loan, but as a verified account, you can borrow up to $5,000. Verified app users are allowed to take loans 24 times a year, which means you can borrow up to $120,000 in 12 months. But remember that you can only request the second loan if your first one has been completely returned to the Venmo company.
There Are Two Types of Loans You Can Apply for on Venmo
An important thing you should know when it comes to borrowing money from Venmo is that there are two options you can choose from. Venmo offers Ledge Loans and Instant Loans. To understand the main differences between these two types of loans, we suggest you take a look at the table below.
|Venmo Ledge Loan
|Venmo Instant Loan
|In this loan, Venmo serves as a middleman since your loan will be borrowed from another user.
|Instant loan is given directly by Venmo.
|These loans are obtained through peer-to-peer transactions.
|Instant loans are basically cash advances similar to bank credits.
|If you are interested in this loan, you should launch a campaign describing how much money you require.
|Venmo withholds a certain amount of money from instant loans until the borrower repays the debt.
|Venmo provides the borrower with the money, and once the borrower pays it back, they transfer it to the person who contributed.
|You will have to pay a small fee to receive the money immediately.
Venmo Has Certain Loan Interest Rates and Charges
Before getting a loan from Venmo, you should inform yourself about the interest rates and charges you will be facing as a borrower. You may be charged an annual percentage rate which can be anywhere between 14.99% to 23.99%. However, that all depends on your account type and the loan that interests you.
In Case of Missed Payment, You Could Face Certain Penalties
Venmo is not very forgiving regarding missed payments, so keep in mind that you could face certain penalties if you are not punctual with your payments. There are a few different ways Venmo can get back the money in case of a missed payment. Some of them are
- Deducting money from your account balance without giving you a prior warning,
- Since Venmo is partnered with PayPal, they are allowed to deduct funds directly from your PayPal account without your approval,
- The company has a right to report you to the debt collection agency for intervention, and you could face a lawsuit.
Decide Whether Borrowing Money From Venmo Is Right for You
Now that you know some of the most important things regarding borrowing money from Venmo, think about whether this option is actually worth it. Although these loans seem easy to obtain, many other things that come into question. The most important thing is not to make rushed decisions and give yourself time to think about the best strategy for handling your money in order to remain stable with your finances.