“Financial stability in an app” – that’s the tagline of Even, a company which offers interest-free paycheck advances, with no credit check required. Unlike payday loans which let you borrow against your entire paycheck, Even takes a more conservative (and mathematically rigorous) approach to prevent borrowers from going beyond their means.
When you sign up for the service, Even looks at your inbound cash injections and calculates your average pay per payday. If you have a below-average pay period, the service offers you a ‘boost’ (Even’s term for the payday loan) to ensure that you get your expected amount and “always know your bills are covered” . Unlike loans, the boost is interest free. Even makes money through a $3/week subscription fee.
Even does not apply a deadline to repay the loan. Instead, the service uses your pay period surpluses; when you have a higher than average pay period, Even uses the positive different to pay back any outstanding advances. The best analogy for this is that it’s like having a bank account from which you can overdraw, without the fees.
While there isn’t a hard deadline to repay the advance, the Even Terms of Service do say that the amount is paid off within four installments. Users can have up to three outstanding advances at once. There’s no repayment required while the pay is below the account average.
In order to keep their baselines accurate, Even only works if you’re paid via direct deposit. You also need some previous paystubs from your employer for the averages to be calculated. While the service is intended for people who work hourly rather than on salary, freelancers can’t always use the service because they aren’t necessarily paid on a regular basis. Also, if you work multiple jobs, you can only use payments from one job on your account.
Each application is reviewed manually and you can be rejected if your bank account is currently overdrawn or if you recently overdrew your account. They also emphasize in their terms that the payment advance is not the same as a loan; it is a “subscription money management service” brought to you by a “financial technology company”. Other requirements mentioned in their terms include:
- You must be 18 or older
- One employer must account for at least 50% of your income
- You must have a smartphone with a data plan and location services (GPS)
If you lose your job, you can pause the service for up to six months and then start repayment when you find a new job. Users can cancel their account at any time, but they still need to pay any outstanding balances.
While Even says they will not report the debt to credit bureaus or sell balances to collection agencies, they reserve to use other legal methods as needed to collect payments.
Although the concept is unique and goes against traditional banks, the service is backed by investors involved with Amazon, PayPal, Venmo, Walmart, Google, and Facebook.
