Can You Borrow Money From Chime?

Wondering if you can borrow money from Chime? The answer to that question depends on what, exactly, you mean by "borrow money." Chime isn't actually a bank, but it does offer a banking app and partners with banks to meet the needs of its members/customers. Chime® is a financial tech company that offers some unique benefits for account holders, including the SpotMe service that — for all intents and purposes — is like having access to fee-free, very short-term loans.

SpotMe isn't a traditional loan in the sense that you need to fill out a loan application and wait for approval. However, it is a loan in the sense that Chime advances funds that aren't in your account at the time you make a purchase using your Chime debit card. The vendor gets paid, Chime fronts you the money, then you'll repay Chime with your next deposit. That's how loans work with Chime.

If you think it sounds like Chime offers overdraft protection rather than loans, you aren't wrong. Chime's SpotMe is, in fact, overdraft protection for its member accounts. And overdraft protection functions like a loan. With overdraft protection, the deposit institution covers purchases you make to a merchant when you don't have funds available. That's exactly how SpotMe works, with a big improvement for account holders versus the way overdraft protection usually works. (See what actually happens when you bounce a check.)

With most providers of financial services, however, overdraft protection comes with a hefty fee. What's unique (and amazing) about the way Chime provides loans in the form of overdraft protection is that it doesn't charge members a fee to front money on their behalf in this way. That's right. With Chime, there are no overdraft fees. Zero. None. This isn't ordinary. Bank fees vary greatly (which is why you should shop around before choosing a bank), but overdraft fees generally average around $35. So, having access to the SpotMe feature can save Chime members a big chunk of change in overdraft fees should they ever need an advance.

How much can a Chime member borrow via SpotMe? The answer varies based on a few factors. In order to qualify for SpotMe, first an individual must have an active Chime account with a qualifying direct deposit of at least $200 per month. The maximum amount of overdraft protection available via SpotMe is $200, though not everyone is automatically qualified to receive this amount. Chime sets each member's SpotMe limit based on a combination of factors, including the size and frequency of direct deposits, spending habits, and account history.

If you're looking to borrow a chunk of money to make a major purchase, such as buying a car or a home, Chime isn't the right place to go for that kind of loan. However, if you find yourself running a bit short on funds between paydays, where a few dollars to a few hundred dollars can help you get by until your next paycheck hits your account, then Chime's SpotMe service just may be exactly what you need.