Venmo has become a go-to app for people looking to transfer money to each other. You can send money via mobile phone or desktop, and it requires no bank information or credit card.
It’s free to use Venmo’s services, but some may find themselves with a bill they can’t pay. If you are in need of emergency funds, the question remains: Can you borrow money from Venmo?
Can You Borrow Money From Venmo?
A quick answer to this question is, yes. You can borrow money and take loans from Venmo but just as you have guessed, there are strings attached.
Venmo Loans are divided into two parts, there are Ledge Loans and there are Instant Loans. Let’s take a look at each.
- Ledge Loans
With Ledge loans, Venmo acts as a sort of middleman between users. Venmo is originally known as a platform for peer-to-peer transactions which is commonly referred to as PTP.
With the peer-to-peer transaction, people transfer money, send money, make payments and do business transactions. The good thing is, that loans can be gotten through peer-to-peer transactions too. These are references to Ledge Loans.
Usually, anyone who is interested in a Ledge loan makes a campaign. This individual has to be registered and verified Venmo user or the campaign would not be reckoned with.
The campaign must include the amount of money needed, the reason why the money is needed, and most importantly, how long it would take for the borrower to pay it back.
Other Venmo users who are interested in lending money to this individual will show their interest in Venmo. Once the money is complete, Venmo gives the borrower, calculates the money plus the interest for those who have lent the money, and as the person pays back later, the money will be returned to the account of the individuals that contributed.
- Instant Loans
Money can also be borrowed directly from Venmo. However, there is a limit. Instant loans are also referred to as cash advances on the app.
Cash advances are very similar to bank credit cards. It is important to note that a minuscule amount of money needs to be paid before Venmo can give cash advances.
For new users or users with an unverified account, Venmo permits taking a loan of at most $50. However, verified users can take a loan of at most $5000.
The disadvantage of Venmo Instant Loans is the embargo placed on the amount of money a person can borrow at a time.
While $5000 might be small, the good news is, that Venmo instant loans can be taken twenty-four times a year. Splendid, isn’t it? As long as a person pays back the initial loan, another can be taken and like that, the cycle can repeat itself.
For instant loans, Venmo withdraws a certain amount of money each month until the borrower has paid back the debt.
To get the best out of Venmo instant loan, it is advised that you have a verified account and also verify your identity. Identity verification is also important for Ledge loans.
How Do I Get A Venmo Loan?
Now that you know you can borrow money from Venmo, you must wonder how you can get the loan. It is quite simple and this has been mentioned earlier. To get approved for a Venmo loan, all you need is a verified Venmo account.
For personal reasons, some people love to skip account verification. This is not a good stance if you hope to borrow money. Getting verified on Venmo is quite straightforward. It can be completed in the following steps;
- Open the Venmo app and log in to your account if it is not already logged in.
- Go to the Settings icon and click on it.
- In settings, click on Security.
- Once you have opened the Security icon, click on Identity Verification.
- In Identity Verification, you’ll see One Time Security Check, click on it. Click on Next.
- The app opens a form asking for your details such as full name, date of birth, residential address, and many more. Fill out this form and other required details.
- Once completed, click on Next and continue to follow the instructions until your account is verified.
As soon as your account is verified, you can get the cash advance of $5000 as per request. The reason why an individual has to be verified before getting a loan is that verification is the only way by which Venmo can reduce and cut off fake account users or fake transactions.
It is not a new thing that people can leverage this type of app to conduct fraudulent activities. However, with identity verification, this can be eliminated and the app can be considered safe for people to let go of their money and for others to borrow.
For Ledge loans, aside from having a verified account, you need a campaign as was mentioned previously in this article. For further details, this campaign is what is used to convince other Venmo users to contribute money that matches your request. For a quick response, try as much as possible to let your campaign contain;
- A convincing reason and proof of why you need the amount of money in your request.
- The amount of interest that you can pay conveniently without any hassle
- How long it will take you to pay back the money and the method with which you will pay back the money? This can be the installment pattern.
Adherence to these simple steps above proves an easy way to get a Venmo Loan.
What Are The Requirements For Getting A Venmo Loan?
Venmo doesn’t give loans to just anyone, but this doesn’t mean that there is a long line process to being able to acquire a loan. The most important requirement to get a substantial loan on Venmo is to be a verified Venmo user or to own a verified account.
To get loans on Venmo at all and to even become a verified user, you need to have a Venmo registered account. The hurdle is at this junction because there are requirements to own an account on Venmo. The four main requirements are listed consecutively.
- To own an account in Venmo, you have to be at least 18 years of age and also have a personal bank account. If you do not meet this requirement, you’ll be unable to create a Venmo account.
- The individual has to be a US resident. Venmo works only in the US and anywhere outside the US means a stop to the transactions on the app.
- The individual must have an active US cell phone. This is important because there will be a lot of sending and receiving of messages.
- The user must have the latest version of the Venmo app.
Understanding that a Venmo account cannot be acquired without meeting requirements 1 – 4 above is also understanding that getting a loan is impossible without those requirements.
If you meet these requirements but do not have a Venmo account, open an account, verify the account and apply for the loan you want. You will be sure to get it.
What Interest Rate Does A Venmo Loan Charge?
One of the things that scare people away when it comes to taking loans is the interest rate that comes with it. Venmo’s interest rate may not be so little but when compared with the rate of other loan apps, Venmo’s rates are better and somewhat moderate.
While for Ledge loans, an individual is allowed to specify the interest rate they can comfortably pay, with Instant Loans, the interest rate is decided depending on the type of account you hold on Venmo. However, the rate varies from about 12% – 21%.
There are three Venmo account types. These are typically one account, type two accounts, and type three accounts. Venmo describes its interest rates as APR – Annual Percentage Rates. The Annual Percentage Rates for each account type are;
- Account Type 1 – This carries the least amount of interest rate which is about 11.99%.
- Account Type 2 – The interest rate is in the middle of that of account type 1 and account type 3. It is about 17.99%.
- Account Type 3 – This carries the highest amount of interest rate of about 20.99%
Interest rates add up to only a small amount of the entire loan. Added to APR for cash advances however is a prime interest rate of 3%. For every transaction on Venmo that is carried out with the cash advance, an interest of 3% is charged.
You need to also know that Venmo withdraws the interest from your account on the transaction date and also every month until the loan is completely refunded.
Borrowing doesn’t have to be a hassle even if it makes one into a debtor for a little moment. The urgent need for money and certain financial issues may be beyond human control, but the place to borrow and make changes is perfectly within your control.
Venmo has made it easier, and you shouldn’t need to go through bank stress before the amount of cash you need is wired to you through the ever-efficient app for day-to-day money transactions. Don’t forget that you can borrow money from Venmo as long as you have an account and you are verified.