Popular peer-to-peer PayPal Venmo has a new social feature, called Venmo Loan.
This article will take you through the ins and outs of Venmo Loans, looking at application procedures, eligibility requirements. But first, what is a venmo loan?
About Venmo Loan
Venmo is a P2P (peer-to-peer) payment app that allows users to send and receive money from other Venmo users via phone.
The app can also be used to buy from an expanding roster of retailers.
Venmo Loans, as they are also known, lend money to users in the app.
The purpose of this microloan service is to help those facing temporary financial difficulties and, at the same time, provide a borrowing experience that’s as smooth as possible.
Because of its convenient interface and broad adoption, Venmo has simplified borrowing from or lending to friends so that it requires no effort.
Applying for a Venmo Loan
If you want to apply for a Venmo loan, you must first have your account at the service verified.
To undergo the verification process, you must provide the following:
i. Your full legal name
ii. Home address
iii. The last four digits of your SSN or ITIN. There is also the option of stating that you have no SSN.
Note that: The company states clearly that they do not provide lending services to their users but rather for making payments between two people and other financial products such as digital direct deposits along with Venmo debit cards and even a Venmo credit card.
Requirements for creating a Venmo account
1. Age Requirement
You must be at least 18 to create a Venmo account. However, Venmo is tailored to individuals. There are different services for businesses.
2. Legal Residency
Currently, Venmo is only available in the U.S. You’ll have to provide a U.S. address and open up an account in the US.
3. Mobile Phone
You’ll also need a compatible phone for account verification and transaction notifications. Check that your device has the Venmo app, which is available for iOS and Android.
4. Bank Account
Simply link a US bank account to your Venmo account. This is where money will be sent to and received from.
Make sure you have the account number and routing number from your bank handy.
5. Identity Verification
Venmo may require additional steps for identity verification. This usually entails writing your legal name, date of birth, and the last four digits of your Social Security number.
6. Email Address
A valid email address is required to open a Venmo account. It is used for informational communications and account notifications.
7. Funding Source
It doesn’t have to, but linking a debit card or credit card adds more options for funding your Venmo transactions.
8. Social Security Number (SSN)
Venmo may ask you to provide your Social Security number for identity verification.
You can link your debit or credit card up to Venmo as well, which allows you to use the service to send money to vendors and people you know without having to link a bank account.
However, if you haven’t linked your Venmo account with a U.S. bank U.S. bank, then what about transferring money directly into or out of your cash card?
How does it work?
The app takes the money from one user and deposits it into the intended recipient’s Venmo balance.
There are two basic ways to use Venmo: transferring money between friends and family or paying for goods and services, all without having any physical cash.
To provide even more payment options, Venmo has partnered with Synchrony Bank to be a credit card company and offers eligible users the Venmo Visa Credit Card.
Alternatively, you can request a Bancorp Bank Venmo Mastercard Debit Card, which draws directly from your Venmo balance and doesn’t carry any line of credit.
Steps to Set Up a Venmo Account
1. Download the Venmo app
Venmo is mainly an app, so be sure to download the Venmo app on your mobile first. For iOS (Apple) and Android devices.
2. Install and open the app
Once you’ve downloaded the app, simply install it on your device and start using it.
3. Sign Up for an Account
Click on the “Sign Up” or “Get Started” button to start creating an account.
4. Provide your email and create a password.
Please enter your email address and create a strong password to secure your Venmo account.
5. Verify your email
Venmo will send a verification e-mail to the address you entered. Please check your email inbox and follow the instructions to confirm your address.
6. Enter personal information
Give your full name, date of birth, and optional phone number.
7. Link a bank account
To use Venmo, one needs to link it up with a U.S. bank account. Please provide the following information: bank account number and routing numbers.
Pros and Cons of Venmo Loan
Pros
1. Accessibility
Since loan application and repayment are both done within the Venmo app, things just got really convenient—and fast!
2. Quick approval process
Thanks to Venmo’s streamlined review procedure, loans are sanctioned more rapidly than most traditional lending institutions.
3. Competitive interest rates
Users of Venmo, however, are able to earn competitive interest rates when they borrow funds.
4. Seamless repayment
Repaying the loan can easily be subtracted from a user’s Venmo account, making repayment easier.
Cons
1. Limited borrowing options. You can’t borrow money from Venmo as the borrowing alternatives are relatively constrained to those of a traditional bank.
2. Smaller loan amounts: The microloan operation of Venmo limits the amounts lent out and just serves as a temporary financial resource.
Conclusion
If you’re looking for a hassle-free borrowing experience, Venmo Loans is an option to consider.
Venmo loans are a constantly changing borrowing option. They offer simplicity and convenience, together with competitive rates, to make them an appealing substitute for traditional lenders.
While Venmo Loans have a number of inherent advantages and deficiencies, they constitute another channel for users to cover their short-term financial needs.
The fact that its integration with the Venmo app makes it convenient to use does not mean you should apply for every loan on offer.
Well, then, why not apply for your PPP (Paycheck Protection Program) to practical use and take out a Venmo Loan?
