How To Apply For Venmo Loan? 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? See how to apply for Venmo loan.
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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 Instant loans and there are ledge loans. Let’s take a look at each and how to apply for Venmo loan.
• Instant Loans
Money can also be borrowed directly from Venmo. However, there is a limit. The 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 in 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 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.
• Ledge Loans
With Ledge loans, Venmo acts as a sort of middle man 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 as 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.
How to Apply For Venmo Loan?
Now that you know you can borrow money from Venmo, you must be wondering how to apply for Venmo 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;
Steps on How to Apply For Venmo Loan
- 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.
- After Opening The Security Icon, Click On Identity Verification.
- In Identity Check You Will See A One Time Security Check, Click On It. and Click Continue.
- The App Opens A Form Asking For Your Information, Such As Your Full Name, Date Of Birth, Home Address, And More. Complete This Form And Other Required Information.
- When You’re Done, Click next and Follow the Prompts until Your Account Is Verified.
Once your account is verified, you can receive the $5,000 deposit upon your request. The reason a person needs to be verified before receiving credit is that verification is the only way Venmo can cut and slash fake account users or fake transactions.
It is nothing new that people can use this type of app to perform 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 lend money to others.
For Ledge loans, in addition to a verified account, you also need a campaign, as mentioned earlier in this article. For more details, this campaign is used to persuade other Venmo users to contribute money corresponding to your request. For a quick response, try to keep your campaign as limited as possible;
- A convincing motivation and proof of why you need the amount in your application.
- The amount of interest you can easily and conveniently pay
- How long it will take to refund the money and which method do you use to refund the money? This can be the payment pattern in installments.
Following these simple steps above proves to be an easy way on how to apply for Venmo loan.
What are the requirements to get a Venmo loan?
Venmo doesn’t lend to anyone, but that doesn’t mean there is a lengthy process to get a loan. The main requirement to get significant credit from Venmo is to be a verified Venmo user or have a verified account.
To even get credit on Venmo and even become a verified user, you need to have an account registered with Venmo. The hurdle is at this intersection, as there are requirements to have an account with Venmo.
The four most important requirements are listed one after the other.
1. To have an account with Venmo, you must be at least 18 years old and also have a personal bank account. If you don’t meet this requirement, you won’t be able to create a Venmo account.
2. The person must be a US resident. Venmo only works in the US and anywhere outside the US in-app transactions will be discontinued.
3. The person must have an active US cell phone. This is important because a lot of messages are sent and received.
4. The user must have the latest version of the Venmo app.
Understanding that a Venmo account cannot be purchased without meeting the requirements 1-4 above also means that you understand that without these requirements it is impossible to get a loan.
If you meet these requirements, but don’t have a Venmo account, open an account, verify the account, and apply for the desired credit. You will get it for sure.
How Can I Verify a Venmo Account?
We continue to talk about the benefits of verifying your account with Venmo. So, to make it easier for those who don’t know how to verify their account, we’ve created a quick step-by-step guide to get your account verified in no time.
But first, here’s what Venmo needs from you to verify your account:
- Your full legal name
- Your home address
- The last four digits of your social security number/tax identification number
And if you don’t have a social security number, you can click the “I don’t have an SSN” option.
Please also note that Venmo may decide that the information you provide is insufficient to verify your account. In this case, Venmo will contact you and ask you for additional verification documents, such as your US passport or driver’s license.
It can take up to three business days for your account to be verified after you verify the new information. And to verify your account, follow these steps:
- Open the Venmo app on your phone
- Tap the three horizontal lines in the top left corner of the screen
- Tap “Settings” and scroll down to find “Security” and tap it
- Select “Identity Verification” and the “Security One Time Verification” page appears. Then tap Next.
- Fill in the necessary information such as your name and date of birth
- Select “Next” and follow the further instructions
What interest rate does a Venmo loan charge?
One of the things that put people off when taking out a loan is the interest that comes with it. Venmo’s interest rates may not be that low, but compared to other lending apps, Venmo’s interest rates are better and a bit moderate.
While ledge loans allow a person to specify the interest rate they are comfortable paying, instant loans set the interest rate based on the type of account you have with Venmo. However, the percentage varies between about 12% and 21%.
There are three types of Venmo accounts. These are usually one account, two accounts, and three accounts. Venmo describes its interest rates as APR – Annual Percentages. The effective annual rates for each account type are:
The 3 Types of Venmo Accounts
- Account Type 1 – This has the lowest interest rate at around 11.99%.
- Account type 2 – The interest rate is in the middle between account type 1 and account type 3. It is about 17.99%.
- Account Type 3 – This has the highest interest rate of about 20.99%
Interest is only a small part of the total loan. However, for cash advances, a base rate of 3% is added to the APR. Any transaction on Venmo made with the cash advance carries 3% interest.
You should also know that Venmo charges interest on the transaction date and also every month until the loan is completely refunded.
FAQ – How To Apply For Venmo Loan?
Can you get a Venmo Instant Loan?
Not only can you borrow money from Venmo, but you can also take out loans directly! So if you’re in trouble, Venmo is definitely there for you. However, keep in mind that you have to pay a small fee to receive the money immediately.
What interest rates does Venmo calculate?
The annual percentage rate (APR) that Venmo offers can range from 14.99% to 23.99%.
The percentage Venmo charges mainly depend on your account type. The lowest interest rates go to type one accounts and the highest interest rates go to type three accounts, with type two accounts somewhere in the middle.
Why take out a Venmo loan instead of a bank loan?
As one of the most popular money transfer apps in the United States with over 52 million active users, Venmo is only eager to expand its services by making loans.
But the question lingers: why take a loan from Venmo in the first place? Why not just take out a standard bank loan like everyone else?
The main thing that makes Venmo loans more attractive than bank loans is that Venmo does not perform a credit check.
When trying to get a bank loan, look at your credit score first. And in many cases, people have been denied credit because of their bad credit history. Fortunately, with Venmo, you don’t have to worry about that.
What is the maximum amount you can borrow from Venmo?
If you just created a new account with Venmo, you are only allowed to borrow $50. With a verified account, on the other hand, you can borrow up to $5,000.
The good news is that it is free to verify your account. And if you do, you also get the advantage of borrowing 24 times a year.
But you must pay off your old debt with Venmo before taking on a new one. So in theory you can borrow up to $120,000 a year from Venmo.
How will Venmo get their money back if you don’t pay?
Being able to get $5,000 in loans up to 24 times a year sounds like a great deal, but you might be wondering, “What’s stopping me from taking a loan and not paying it back?”
In this case, we would like to inform you that Venmo has some options to get its money back; here are a few:
- Instant withdrawal from your Venmo balance
If you refuse to send the payments to Venmo, they have the right to deduct the amount owed directly from your Venmo balance.
- Take the money from your PayPal account
PayPal actually owns Venmo and it is part of the user agreement that Venmo can deduct the money you owe them from your PayPal balance.
- Report to a collection agency
If you don’t find any money in your Venmo balance or don’t have a PayPal account/balance, Venmo will report you to a collection agency. A collection agency can and will sue you if you refuse to pay your debt.
Conclusion – How To Apply For Venmo 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.
Venmo’s credit services are a great option if you’re still working on your credit score or if you need an immediate loan. Not to mention, Venmo’s interest rates are reasonable compared to some other options on the market, with the ease of the whole process.
The only downside to Venmo’s loans is the credit limit, which is only $5,000. However, this may differ in the future and change over time.