Cash App has become a popular platform for peer-to-peer money transfers and various financial transactions. If you’re exploring options to Borrow Money Cash App, you might be interested in understanding their “Pay Over Time” loan feature. This article, based on the official Cash App Retroactive Pay Over Time Loan Agreement, breaks down the key aspects of this loan program to help you make informed decisions.
Understanding Cash App “Pay Over Time” Loans
Cash App, in partnership with First Electronic Bank, offers a specific type of loan called “Pay Over Time.” It’s crucial to understand that this isn’t a general borrowing feature within the app but rather a loan tied to eligible transactions made with your Cash App Visa® Prepaid Card. First Electronic Bank, a Utah-chartered industrial bank, is the originator and issuer of these loans.
Let’s clarify some key terms as defined in the loan agreement:
- Amount Financed: This is the principal amount you borrow. It’s equivalent to the cost of the specific transaction you choose to finance through the “Pay Over Time” option within your Cash App Activity tab.
- Finance Charge: This is the cost of borrowing, expressed as a dollar amount. It’s calculated as a percentage of the “Amount Financed” and detailed in your Truth in Lending Act Disclosure.
- Total of Payments: This is the total amount you will repay, including both the “Amount Financed” and the “Finance Charge.”
- Final Due Date: This is the ultimate date by which you must repay the “Total of Payments.”
- Overdue Interest: This is a weekly charge that may be applied if you fail to pay the outstanding balance by the “Final Due Date.”
- Payoff Amount: This is the remaining balance plus any accrued “Overdue Interest.”
How Cash App Loans Work: Disbursement and Repayment
When you agree to a “Pay Over Time” Loan Agreement, First Electronic Bank will disburse the “Amount Financed” directly to your Cash App account. It’s important to note that these loan proceeds are intended for personal, family, or household purposes only.
Your Promise to Pay:
By entering into this agreement, you commit to repaying the Bank. This includes:
- Paying the “Total of Payments” on or before the “Final Due Date.”
- Paying the “Payoff Amount” promptly if you fail to meet the “Final Due Date.”
Automatic Payments and Authorization:
You authorize Cash App to automatically initiate payments from your Cash App Balance and, if needed, from your linked debit card to cover your loan repayment. Here’s how it works:
- Initial Payment Attempt: On the “Final Due Date,” Cash App will first attempt to withdraw the outstanding balance from your Cash App Balance.
- Secondary Payment Attempt (if needed): If your Cash App Balance is insufficient, a second attempt will be made to withdraw the remaining amount from your linked debit card.
- Continued Payment Attempts: Even after the “Final Due Date,” Cash App may continue to attempt withdrawals from your Cash App Balance and debit card until the “Payoff Amount” is fully satisfied. They may also initiate payments when your Cash App Balance receives funds equal to or exceeding 20% of the “Payoff Amount.”
Managing Payments:
- Automatic Payment Authorization: By taking out this loan, you agree to the Autopay Terms. You can opt out of automatic payments by contacting Cash App Support. However, opting out means you’ll need to manually manage your payments.
- Manual Electronic Payments: You can choose to make payments manually through your Cash App Balance or a linked debit card.
- Payment by Mail: While less convenient, you can also send physical checks payable to “First Electronic Bank ℅ Square Capital, LLC” to a specified address in Dallas, TX. Ensure your check includes your Cashtag, Loan ID, “Amount Financed,” and agreement date.
Payment Processing Details:
- Cash App can process payments without waiving any rights.
- Payments should be made electronically or via check; cash payments are not accepted.
- You are responsible for any fees if your bank rejects a payment.
- Cash App is authorized to resubmit returned electronic payments and correct errors, including reversals or credits to your debit card if necessary.
- Funds may be withdrawn from your Cash App Balance or linked debit card as early as the same day payment is received.
Loan Terms and Conditions: Repayment, Default, and Disputes
Repayment Schedules:
You can choose between two repayment schedules:
- Pay-in-Four: Four equal weekly payments, with the final payment on the “Final Due Date.” The first three payments are considered voluntary prepayments.
- All-at-once: A single payment due on the “Final Due Date.”
Voluntary Prepayments & Early Repayment:
- If you choose “Pay-in-Four,” the initial three payments are optional. Missing these won’t incur late fees, but the missed amount will be added to subsequent payments. You can even skip all prepayments and pay the “Total of Payments” on the “Final Due Date.”
- You can prepay your loan (partially or fully) at any time without any prepayment penalties or fees. Early repayment may result in a refund of unearned finance charges, as per your state’s law.
Overdue Interest:
If you fail to pay by the “Final Due Date” and the balance remains unpaid for a period (typically seven days, or longer if required by law), “Overdue Interest” will start accruing weekly on the unpaid “Amount Financed” until the “Payoff Amount” is paid in full.
Default Conditions:
Several situations can lead to loan default, including:
- Failure to pay the “Total of Payments” by the “Final Due Date.”
- Rejected or unpaid payments.
- Bankruptcy or insolvency proceedings.
- Inability to repay obligations (including due to death or legal incapacity).
- Providing inaccurate or false information.
- Restriction, suspension, or termination of your Cash App account.
- Violation of any term in the Loan Agreement.
- Permanent residency outside the United States.
Consequences of Default:
Upon default, Cash App may take actions such as:
- Debiting your Cash App Balance or linked debit card for the outstanding balance.
- Suspending your ability to use certain or all Cash App features until the loan is settled.
- Charging late fees (after any applicable grace period).
- Preventing you from obtaining future credit from First Electronic Bank.
- Taking any other legally permitted action.
Merchant Disputes and Refunds:
If you have issues with goods or services purchased using the “Pay Over Time” loan, you must resolve them directly with the merchant. Cash App may not be able to intervene in merchant disputes. Refunds or disputes related to the financed transaction are governed by your Card agreement and the Cash App Terms of Service. You remain responsible for loan payments even if you initiate a return or dispute with the merchant.
Important Legal and Policy Information
Loan Documents:
Several documents govern your “Pay Over Time” loan. It’s crucial to review them carefully:
- The Cash App Retroactive Pay Over Time Loan Agreement itself.
- The E-Sign Consent you provided during the loan application.
- The Pay Over Time Summary and Truth in Lending Act Disclosure.
- The Autopay Terms.
- The Cash App Acceptable Use Policy.
- Relevant privacy notices.
Applicable Law and Jurisdiction:
The Loan Agreement is governed by Utah law and applicable federal law. Any legal disputes will be subject to this jurisdiction.
Binding Individual Arbitration:
The agreement includes a binding individual arbitration clause. This means that most disputes must be resolved through individual arbitration rather than court proceedings or class action lawsuits. It’s important to carefully review the arbitration section for details on the process and your rights, including a potential opt-out provision.
Military Annual Percentage Rate (MAPR) Statement:
Federal law provides protections to U.S. military members and their dependents regarding credit costs. The Military Annual Percentage Rate (MAPR) cannot exceed 36%. This rate includes finance charges, fees, and certain other costs. You can call a toll-free number provided in the agreement for disclosures and payment obligation information.
State Notices:
The agreement includes specific notices for residents of Iowa, Kansas, Massachusetts, Missouri, Nebraska, New Jersey, Ohio, South Dakota, Utah, Washington, and Wisconsin, addressing consumer rights and state-specific regulations.
Is Cash App Borrow Right for You?
Understanding the terms and conditions of Cash App’s “Pay Over Time” loan is essential before you borrow money Cash App using this feature. It offers a way to finance purchases made with your Cash App card, but it’s crucial to be aware of the repayment obligations, potential fees like “Finance Charges” and “Overdue Interest,” and the implications of default.
Key Considerations:
- Short-Term Loan: This is a short-term loan tied to a specific transaction, not a general line of credit.
- Fees and Interest: Be aware of the “Finance Charge” and potential “Overdue Interest” if you miss payments.
- Automatic Payments: Understand how automatic payments work and your options for managing them.
- Legal Agreement: This is a legally binding agreement. Read all loan documents carefully before proceeding.
Before you decide to borrow money Cash App through “Pay Over Time,” carefully assess your financial situation and ability to repay the loan according to the agreed terms. Ensure you understand all associated costs and responsibilities outlined in the Loan Agreement.
