The “free” cash advance that is not free
MoneyLion advertises cash advances with “0% interest” and promises “up to $500 per day.” Sounds great on the surface. But according to the CFPB And the Attorney General of New Yorkwhat actually happens is very different.
750%Effective Interest Rate (NY AG)
$1.75 millionCFPB Settlement
2M+Repeat progress made
How the costs add up
According to NY AG James, MoneyLion uses different cost layers that are not clear in advance:
“Turbo charges” for instant access
Do you want your money immediately? MoneyLion charges a “turbo fee” of up to $8.99 for a $100 advance. The real cost of transferring money instantly? According to the National Center for Consumer Lawit’s about 4.5 cents. That’s a markup of 20,000%.
The math: MoneyLion limits each advance to $100. To get the advertised $500, you need five separate advances with five separate turbo charges. That’s $44.95 in fees just to access $500 of your own earned wages – money you’ve already worked for.
The tilt pressure
MoneyLion ‘relentlessly’ pressures users to add a tip on top of fees, according to NY AG’s complaint. About 40% of advances included tips. The AG claims the company is implicitly threatening negative consequences for users who don’t tip.
Deferred deposits for non-payers
If you decline the turbo fee, MoneyLion will artificially delay your deposit. Do you want your money faster? Pay the fee. It’s a classic pressure tactic: create urgency and then count on the solution.
The membership trap
The CFPB’s lawsuit focused on a different issue: MoneyLion’s membership program. According to Couch dive:
- MoneyLion charged $19.99-$29/month for membership – required to access loans
- Borrowers could only cancel membership after their loans were paid off
- Unpaid membership fees blocked cancellation attempts
- Service members were charged rates that exceeded the Military Lending Act limit of 36%
The $1.75 million CFPB settlement now prohibits MoneyLion from preventing borrowers from canceling memberships, collecting unpaid past membership fees and blocking borrowers from paying off loans using their credit reserve accounts.
Why cash advance apps should be scrutinized
MoneyLion is not alone. The earned wage access industry – apps that give you early access to pay stubs – has exploded in popularity. But many of these apps use the same playbook:
What they advertise
- “0% APR” or “no interest”
- “Get paid early”
- “Free cash advances”
- “Optional tips”
What actually happens
- Mandatory fees for direct access
- You borrow your own money, which involves costs
- Effective rates reach hundreds of percent APR
- Aggressive tipping creates social pressure to pay more
Look forward to: Any financial product that charges you to access money you’ve already earned is essentially a personal loan, whatever they call it. The fancy app interface and “0% interest” marketing don’t change the math.
What to do when using MoneyLion
- Check your expense history — Check how much you actually paid in turbo charges, tips and membership fees last year. The total may surprise you.
- Cancel if you want to leave — Under the CFPB settlement, MoneyLion can no longer prevent you from canceling your membership. If they try, file a complaint with the CFPB.
- Check your credit report — Some CFPB complaints about MoneyLion involved improper credit reporting. Get your reports AnnualCreditReport.com.
- File a complaint with the CFPB bee consumerfinance.gov/complainance if you have been charged unexpected costs
- Consider alternatives – An emergency fund (even $500) completely eliminates the need for cash advance apps. If you’re stuck in a cycle, the underlying budget math needs attention.
Caught in a cycle? If you regularly use cash apps to get through paychecks, the real problem isn’t timing; it’s that the math doesn’t add up. Take the free Find Your Path quiz to find out where you really stand and what your real options are.
Sources
Frequently asked questions
Is MoneyLion a personal loan?
MoneyLion markets itself as an “earned wage access” app that offers cash advances with a 0% annual interest rate. However, New York’s attorney general claims that when fees and tips are included, the effective interest rate can reach 750%. The CFPB has also taken action against the company. Whether you call it a personal loan or a cash advance, the costs to consumers can be significant.
Can I cancel my MoneyLion membership?
Yes. Under the November 2025 CFPB settlement, MoneyLion is now barred from preventing borrowers from canceling their memberships. They also cannot collect past unpaid membership fees or prevent you from paying off loans using your credit reserve account. If you have trouble canceling, file a complaint with the CFPB.
How do I file a complaint about MoneyLion?
File a complaint with the CFPB at consumerfinance.gov/complaince. Include details about any unexpected charges, membership issues, or incorrect credit reporting. You can also contact the New York Attorney General’s Consumer Helpline at (800) 771-7755 if you are a New York resident.
Are cash advance apps safe to use?
Cash apps can be useful for occasional use, but frequent use often creates a cycle of dependency. Be aware of turbo charges, mandatory tips, subscription fees and other costs that may add up. If you use these apps regularly, it could indicate a broader budget issue that needs to be addressed.
TL; DR: MoneyLion is facing a $1.75 million CFPB settlement and a lawsuit from NY AG alleging its “0% APR” cash advances yield effective rates of up to 750% due to hidden turbo fees, forced tipping and membership traps. If you use the app, see your total costs paid and know that you can now cancel your membership freely. Building even a small emergency fund is a better long-term solution than cash advance apps.
(Source: CFPB / New York Attorney General / National Consumer Law Center)
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