Have you ever wondered about Venmo’s policies for giving out loans? Keep reading as we go into detail about borrowing money from Venmo.
But is it possible to borrow money from Venmo?
There is no option to borrow money from Venmo. A User can create a campaign, and specify an interest rate and payback period. The Lenders can then pay an amount, and upon being fully funded the campaign will close. After a one-time approval Ledge, with Venmo will transfer money to the borrower.
UPDATE: Venmo Loan is not Available Anymore in 2023.
Quick Overview of Venmo Loan:
| Overview of Venmo Loan | |
|---|---|
| Loan Amount | Up to $50 – $5,000 for verified users |
| Repayment Term | 4-6 weeks (new users), 6-12 months (verified users) |
| Interest Rate | 14.99% to 23.99% |
| Credit Check | No credit check required |
| Eligibility | Must be at least 18 years old, have a Venmo account in good standing, and meet other eligibility requirements |
| Application Process | Apply through the Venmo app |
| Funding Time | 1-3 business days (new users), same day or next day (verified users) |
| Late Payment Fee | $27 or 5% of the unpaid amount, whichever is greater |
| Early Payment Penalty | None |
Disclaimer: Please note that the availability of Venmo loans may vary and it is not guaranteed that this service is still available or available to all Venmo users. Venmo may also have specific eligibility criteria and other requirements that must be met before a loan can be approved. We advise you to contact Venmo’s customer support on their loan programs and their availability.
Venmo Loan Requirements:
- You must be at least 18 years old to get a Venmo loan.
- United States Resident
- You must have a U.S cell phone
- Venmo App is Updated to its latest version.
UPDATE: Unfortunately, the loan feature is not available at the moment. But you can try the Ledge loan which is powered by Venmo.
How to Borrow Money from Venmo Ledge Loan
- A User can create a campaign, specify an interest rate and payback period, then share it with friends and family.
- The Lenders can then pay an amount, and upon being fully funded the campaign will close
- After a one-time approval Ledge, with Venmo will transfer money to the borrower, from all the lenders.
- Once the loan starts, Ledge will automatically calculate payments for all lenders, then make monthly transfers from the borrower’s Venmo account.
Can You Take an Instant Venmo Loan?
Not only do you get to borrow money from Venmo, but you also get to take instant loans! So, if you’re in a pinch, Venmo definitely has your back.
However, keep in mind that you’ll have to pay a small fee for receiving the money instantly.
What Interest Rates Does Venmo Charge?
The annual percentage rate (APR) that Venmo offers can be anywhere from 14.99% to 23.99%.
The percentage that Venmo charges mainly depends on your account type. The lowest interest rates go to account type one, and the highest rates are for type three accounts, with type two accounts being somewhere in the middle.
Why Take 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, it only makes sense for Venmo to expand its services by giving out loans.
But the question still remains: why would you take a Venmo loan in the first place? Why not just take a standard bank loan like everyone else?
The main thing that makes Venmo loans more tempting than bank loans is that Venmo doesn’t do a credit check.
When you try to take a bank loan, the first thing they look at is your credit score. And in many cases, people have been denied a loan because of their bad credit scores. Fortunately, with Venmo, you wouldn’t have to worry about that.
What’s the Maximum Amount You Can Borrow From Venmo?
If you’ve just created a new account on Venmo, you’d only be allowed to borrow $50. With a verified account, on the other hand, you’d be able to take out a loan of up to $5,000.
The good news here is that it’s free to verify your account. And when you do, you’ll also get the added perk of taking a loan 24 times throughout the year.
But you have to settle your old debt with Venmo before taking another one. So, in theory, you’re allowed to borrow up to $120,000 a year from Venmo.
How to Verify a Venmo Account
We keep talking about the advantages of verifying your account on Venmo. So, to make things easier for those who don’t know how to verify their accounts, we’ve created a quick step-by-step guide for you to verify your account in no time.
But first, here’s what you can expect Venmo to ask you to provide to verify your account:
- Your full legal name
- Your home address
- The last four digits of your social security number / individual taxpayer identification number
And if you don’t have a social security number, you can click on the “I don’t have an SSN” option.
Also, keep in mind that Venmo might decide that the information you provided isn’t enough to verify your account. In that case, you’ll be contacted by Venmo, and they’ll ask you to provide additional verification documents like your U.S. passport or driver’s license.
Then, after reviewing the new information, it’ll take up to three business days to get your account verified. And to verify your account, follow these steps:
- Open the Venmo app on your phone
- Tap the three horizontal lines on the top left corner of the screen
- Tap “Settings,” scroll down to find “Security,” and tap it
- Select “Identity Verification,” and a “One-Time Security Check” page will pop up, then tap “Next”
- Enter the information needed, like your name and date of birth
- Select “Next” and follow the remaining directions
How Does Venmo Get Their Money Back if You Don’t Pay?
The possibility of getting a $5,000 loan up to 24 times per year sounds like a pretty sweet deal, but you might find yourself asking, “What’s stopping me from taking out a loan and not paying it back?”
In that case, we’d like to inform you that Venmo has a few ways of getting their money back; here are a few of them:
1. Take Money Straight From Your Venmo Balance
If you refuse to send the payments to Venmo, they have the right to take the amount of money they’re due straight out of your Venmo balance.
2. Take the Money From Your PayPal Account
PayPal actually owns Venmo, and it’s part of the user agreement that Venmo can take the money you owe them out of your PayPal balance.
3. Report You to a Debt Collection Agency
In the case of not finding money in your Venmo balance or not having a PayPal account/balance, Venmo will report you to a debt collection agency. A debt collector can, and will, sue you if you refuse to pay what you owe.
How Much Can An Unverified User Get a Loan From Venmo?
Unverified Venmo users are not eligible for loans, as loan offers are only available to verified users.
Types of Venmo Loan
Venmo provides users with the ability to apply for a loan through their “Venmo Credit” option.
This loan option allows borrowers to access credit through a line of credit. The loan amount and the interest rate offered to vary depending on the borrower’s creditworthiness and payment history.
Payments can also be made directly through the app.
Conclusion
Venmo’s loaning services are a great option if you’re still working on your credit score or if you’re in need of an instant loan. Not to mention, Venmo’s interest rates are quite reasonable compared to some of the other options out there with the convenience of the whole process.
The only downside to Venmo’s loans is the loan limit, which is just $5,000. However, that can differ and change over the course of time in the future.
So you wouldn’t be able to buy a car or pay your college tuition using a Venmo loan, but we hardly think anyone would try to finance such large investments via Venmo anyway.
