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How to Borrow Money from Varo: A Comprehensive Guide

So, you’re looking to borrow money from Varo? The truth is, the lending landscape is constantly evolving, and understanding your options is paramount. While Varo Bank doesn’t offer traditional personal loans, they do provide a service called Varo Advance, a short-term cash advance designed to bridge financial gaps. This guide will walk you through everything you need to know about Varo Advance and other alternative borrowing options. Let’s dive in.

Understanding Varo Advance: Your Short-Term Solution

Varo Advance is the primary method through which Varo Bank allows its users to borrow money. It’s crucial to understand the specifics of this service to determine if it aligns with your financial needs. Forget complex interest calculations and lengthy applications; Varo Advance is about simplicity and speed.

How Varo Advance Works

Varo Advance allows eligible customers to borrow up to $500, repayable in a single installment on a predetermined due date, usually aligned with your next paycheck. The exact amount you can borrow depends on factors like your account history and direct deposit activity. This means Varo essentially assesses your financial relationship with them to determine your creditworthiness.

Eligibility Requirements

Not everyone qualifies for Varo Advance. Here are the key criteria:

Qualifying Direct Deposits: You must have received qualifying direct deposits totaling at least $1,000 into your Varo Bank account over the past 31 days. This is crucial for demonstrating consistent income.
Active Varo Bank Account: Obviously, you need an active Varo Bank account in good standing.
Account Activity: Varo analyzes your account activity, looking for positive banking habits and a demonstrated ability to manage your finances.
No Overdrafts: A history of frequent overdrafts can negatively impact your eligibility. Varo wants to see responsible account management.

Fees Associated with Varo Advance

Varo Advance boasts a fee structure that’s relatively transparent. The fees are based on the amount you borrow:

$20 Advance: $0 fee
$50 Advance: $0 fee
$75 Advance: $0 fee
$100 Advance: $6 fee
$125 Advance: $7.50 fee
$150 Advance: $9 fee
$175 Advance: $10.50 fee
$200 Advance: $12 fee
$225 Advance: $13.50 fee
$250 Advance: $15 fee
$275 Advance: $16.50 fee
$300 Advance: $18 fee
$325 Advance: $19.50 fee
$350 Advance: $21 fee
$375 Advance: $22.50 fee
$400 Advance: $24 fee
$425 Advance: $25.50 fee
$450 Advance: $27 fee
$475 Advance: $28.50 fee
$500 Advance: $30 fee

Compared to traditional payday loans with sky-high interest rates, Varo Advance can be a more affordable option, if you meet the eligibility requirements and can repay on time.

How to Apply for Varo Advance

Open the Varo App: Access the Varo Bank app on your smartphone.
Navigate to Varo Advance: Look for the Varo Advance option within the app’s menu.
Check Your Eligibility: The app will assess your eligibility based on your account history.
Select Your Advance Amount: If eligible, you’ll be presented with the available advance amounts.
Review and Confirm: Carefully review the fees and repayment date before confirming your advance.

Alternatives to Varo Advance

While Varo Advance can be a useful tool, it’s not the only option. Explore these alternatives before committing:

Personal Loans: Traditional personal loans from banks or credit unions often offer lower interest rates than cash advances, especially for larger borrowing needs. However, they typically require a good credit score.
Credit Cards: If you have a credit card with available credit, consider using it for short-term borrowing. Be mindful of interest charges if you don’t pay off the balance promptly.
Payday Alternative Loans (PALs): Credit unions offer PALs, which are smaller, short-term loans with more reasonable interest rates than payday loans.
Borrowing from Friends or Family: If possible, consider borrowing from trusted friends or family members. Be sure to establish clear repayment terms to avoid straining relationships.
Negotiating with Creditors: Contact your creditors and explain your situation. They may be willing to offer payment plans or temporarily reduce your payments.

Frequently Asked Questions (FAQs) about Borrowing Money from Varo

1. Does Varo Bank offer personal loans?

No, Varo Bank does not offer traditional personal loans. Their primary borrowing option is Varo Advance, a short-term cash advance service.

2. What is the maximum amount I can borrow with Varo Advance?

You can borrow up to $500 with Varo Advance, depending on your eligibility and account activity.

3. What are the fees associated with Varo Advance?

The fees for Varo Advance range from $0 for $20 and $50 advances to $30 for a $500 advance.

4. How quickly can I receive the funds from Varo Advance?

Once approved, the funds from Varo Advance are typically deposited into your Varo Bank account almost immediately.

5. What happens if I can’t repay my Varo Advance on time?

While Varo doesn’t charge late fees, failing to repay on time could impact your eligibility for future advances and negatively affect your Varo account standing. Contact Varo immediately if you anticipate difficulty repaying.

6. Can I increase my Varo Advance limit?

Your Varo Advance limit is determined by Varo’s internal assessment of your account activity and direct deposit history. Consistently meeting the eligibility requirements and demonstrating responsible banking habits may lead to an increase in your limit over time.

7. Does Varo Advance report to credit bureaus?

No, Varo Advance does not typically report to credit bureaus. Therefore, it won’t directly impact your credit score. However, failure to repay could affect your relationship with Varo.

8. Are there any alternatives to Varo Advance within the Varo app?

Currently, Varo doesn’t offer other direct lending products within the app. The focus remains on Varo Advance as their short-term borrowing solution.

9. What is the difference between Varo Advance and a payday loan?

Varo Advance generally has lower fees and more flexible repayment terms compared to traditional payday loans. Payday loans often come with exorbitant interest rates and shorter repayment periods, making them a riskier option.

10. Can I cancel a Varo Advance after requesting it?

You likely have a short window to cancel a Varo Advance after requesting it. Check the terms and conditions within the Varo app or contact Varo customer support immediately for assistance with cancellation.

11. What kind of direct deposits qualify for Varo Advance eligibility?

Qualifying direct deposits typically include payroll checks, government benefits, and other regular income sources. Transfers from other bank accounts or mobile payment apps usually don’t qualify. Check Varo’s specific guidelines for a complete list of qualifying deposits.

12. Where can I find more information about Varo Advance?

You can find detailed information about Varo Advance within the Varo Bank app or on their official website. You can also contact Varo customer support directly for personalized assistance.