Consumer financial technology company Chime announced the launch of Instant Loans—a product that provides instant access to up to $500 in funds with a fixed interest rate that is “lower than what’s typically observed in the industry.”
Like all of Chime’s services, Instant Loans is said to be easy to use and transparent, and unlike some other loan products, there is “no credit check to qualify.”
Instead, Chime leverages its technology platform and rich data sources “to help determine eligibility.”
On-time payments can also help members build credit over time.
Instant Loans offers three-month installment loans up to “$500 to pre-approved Chime members who receive direct deposits to their Chime Checking Account.”
Members are pre-approved for a loan and “notified of their eligibility within the Chime app.”
Once accepted, eligible members gain “instant access to the loan funds.”
When compared to other types of liquidity products on the market, Instant Loans enables consumers “to borrow at potentially half the cost, and with the added flexibility of having up to three times longer to repay.”
Chime’s Instant Loans has “no late fees or compound interest, just a fixed interest rate of $5 for every $100 borrowed, paid back in three monthly payments of $35.00 per $100 borrowed (29.76% annual percentage rate).”
For greater ease, repayments can be automated and are “designed to not exceed 10% of monthly member cash inflows to ensure affordability.”
Chime also reports on-time payment history “to credit reporting agencies, allowing members to build credit.”
Participants who pay on time may see their credit score increase “by 10-30 points, validated by a prior simulation conducted with Experian2.”
Instant Loans is Chime’s latest innovation, “building on its commitment to enabling financial progress through products centered around consumer needs.”
In 2024, Chime announced the launch of MyPay, which lets eligible members access “up to $500 of their pay before payday with no interest4 and no credit check.”
Since its official launch in July 2024, MyPay has “helped members access billions of dollars.”
SpotMe5, which allows Chime members to overdraw their account without fees, also surpassed a milestone in 2024, “covering more than $30 billion in transactions.”
The Chime Checking Account was one of “the first full-featured accounts to disrupt the traditional banking industry by offering fee-free overdrafts with the launch of SpotMe.”
Similarly, people have increased their credit scores “since opening a Chime Credit Builder Visa Credit Card, which doesn’t charge interest or require a credit check or minimum security deposit.”
As covered, Chime is a financial technology company founded “on the premise that basic banking services should be helpful, easy, and free.”
Chime builds products that allow the company “to succeed when its members do.”
That’s why Chime doesn’t rely on “punitive fees such as overdraft, monthly service, or minimum balance fees.”
Instant Loans are made by The Bancorp Bank, N.A.