Frequently Asked Questions

Rainy Day Topics

How is Rainy Day different from other short-term lenders?

Our goal is to provide a real alternative to the high costs, hidden fees, and predatory practices associated with most short-term lending. We provide loans with no interest or fees of any kind for the first 5 days to make it free to borrow money when there's a short-term emergency. If you need the money longer than 5 days, fees are very simple and straightforward.


How much are Rainy Day loan fees?

After your 5 free days per quarter, the fee is $1/day with no other fees of any kind as long as the loan is paid back on time. At some point in the future, we also hope to be able to offer even better credit options to our best customers.


What is the annual percentage rate (APR) on a Rainy Day loan?

Our APRs are usually less than half the industry average rate—391% according to the Pew Charitable Trusts—and can be as low as 0% if you repay a loan before the end of the free period.  The APR will vary considerably, though, depending on how long you take the loan.  The slider on the home page will provide a good approximation of the APR you can expect. 


How can you charge so much less than other short-term lenders?

There are two reasons payday loans are so expensive:

  1. Default rates. According to a report by the Pew Charitable Trusts, on an annual basis, more than 55% of the money lent to payday borrowers is not repaid.
  2. Greed. Most short-term lenders charge the maximum amount allowed by law. According to Pew, the average annual interest rate of a payday loan is 391%.

Rainy Day is only possible if our members repay their loans in full and on time, and if they recommend friends and family who they believe will do the same. By losing a lot less money on defaults, we can pass those savings on to our members by charging a lot less in fees, and providing free days each quarter.  If we can't reduce default rates, we won't be able to make new loans. 

We are a for-profit business, and as such our goal is to be profitable, but we believe in the long run that making less per loan and truly improving people's lives as a result is the best way to do that.


What does “Socially Driven Lending” mean?

Socially driven lending means two things to us:

  1. Creating a lending option that genuinely helps solve problems rather than making them worse.
  2. Applying the lessons learned by Grameen Bank and other successful microfinance institutions (MFIs) through social media to create a virtually connected lending community, and to make new loans largely based upon the recommendations of that community.

Our hope is to grow exclusively through the recommendations of our members. Rainy Day members who repay their loans on time will be allowed to invite friends to join. If a friend successfully repays their loans, the amount both can borrow will increase. Over time, we hope to be able to offer members who consistently repay on time, and invite friends who repay on time, lots of additional benefits. We're still working out exactly what those will be, but hope to announce them in the not too distant future. 


Why is the company named “Rainy Day”?

The name comes for the expression “Save it for a rainy day”. We strongly believe in the idea behind that expression. Everyone should have some money tucked away for emergencies. Unfortunately, that's a luxury not everyone can always afford. Our goal is to provide that safety net for anyone who doesn't have it, because the alternatives are often extremely costly (e.g. late fees, NSF charges, repossessions, evictions, etc.).


You have a “.org” web address. Are you a nonprofit?

No, Rainy Day is a for-profit company. We chose rainyday.org as our primary domain because it was the simplest and most memorable web address available.  We also own rainyday.io and rainyday.nu.


Is your website secure?

Yes, Rainy Day is based on some of the world's most secure servers, and we use 2048-bit Secure Sockets Layer (SSL) encryption to protect any data you send.


Where is Rainy Day based?

We are based in beautiful Portland, Oregon.


What is the best way to contact you?

The best way to get in touch with us is via email at help@rainyday.org.


If I have a suggestion or complaint, who should I talk to?

Please get in touch with us at help@rainyday.org if there is anything you are unhappy about or feel we could do a better job with. We are a young company and are always genuinely looking for ways to improve. We want to do everything we possibly can to have the biggest positive impact possible. We also have state regulatory bodies' contact details on the Resources page if you'd like to talk to them about Rainy Day.


What is Dwolla and how do I get an account?

Dwolla is a new way to electronically transfer money instantly, and with no fees (or more precisely, no fees for you, $0.50 in fees for us).  You can get an account at https://www.dwolla.com.  This allows us to keep our costs down (as a reference point some other services charge as much as 3% each way, which can equate to as much as $60 for each loan), and we can pass those savings on to you in the form of lower lending rates.  It takes a few minutes to setup the account the first time, but then is quick and easy to transfer money to and from your bank account when you are receiving or repaying a loan.    


How can I repay my loan?

Repaying a loan is very simple. Log in to the My Account page on www.rainyday.org and click the "Repay Now" button. Be sure to select your bank account as the Funding source on the Dwolla confirmation page that pops up. As long as you start repayment on or before the loan due date, your loan will be considered paid on time, even if the funds take a few days to clear. If you run into any difficulty repaying your loan, please let us know by emailing help@rainyday.org.


Can I take a loan if I am in the military?

Yes. As of April 6, 2015, Rainy Day offers free loans to active duty armed services members. Your application still has to make it's way up through the waiting list, and it still goes through Rainy Day's rigorous screening process like all other applicants, but if you are accepted you pay no fees.


Is it true that recommending a friend means lower fees and more free days?

It depends on your friend. If you recommend a friend who repays their loans on time, you will get additional benefits and you'll get them more quickly. If the friend you recommend does not repay their loans on time, your benefits accumulate more slowly, or they may even decrease (e.g. fewer free days per quarter). The more friends you recommend who repay on time, the more benefits you'll receive.


Is it true that whether or not my friends repay their loans will have an impact on my account?

Yes, if you have recommended them to us. Facebook friend behavior will not have an impact on your Rainy Day account unless you recommended them. If your friends repay their loans on time, you get more benefits more quickly. If they don't repay their loans on time, you'll get fewer benefits or may even lose benefits.


How can I recommend a friend? It says I have 0 friend recommendations available.

Because it's currently not possible for us to issue a lot of new accounts, friend recommendations are limited. We've decided to provide those that are available to members who have repaid a number of loans on time.


When will my loan be deposited into my account?

One of the benefits of Dwolla is the money is transferred instantly from Rainy Day to your Dwolla account.  Once your loans been approved the transfer should take place in a matter of minutes.


How soon can I take out another loan?

We require at least one day between loans, and in some states the required waiting period is even longer.


I did not receive my email verification code. What should I do?

Check your spam folder. If it's not there, log in to the site and you'll be able to request that another verification email be sent.


I did not receive my phone verification code. What should I do?

Log in to rainyday.org and request that the verification code be resent.


Why is there a waiting list?

Like many startups, we face numerous challenges in ramping up our service. Unfortunately, at the moment this means we can only provide loans to a small fraction of the number of people who would like one.


I was told I am on the waiting list. Can you tell me how long it will be until I get an account?

Unfortunately, we can't, but we'll be in touch the moment your account is available.


Will everyone who is on the waiting list get an account at some point?

Unfortunately, no. There is a final review before we offer anyone an account and because we have to keep default rates as low as possible for the Rainy Day model to be viable, many accounts will not be approved.


Is there anything I can do to get off the waiting list more quickly?

Yes. If a current Rainy Day member recommends you, your application will be moved to the top of the waiting list.


Will my credit score have an impact on my ability to get a Rainy Day account?

No. We don't use credit scores in the Rainy Day approval process.


Can my loan be rolled over?

No. We require all loans to be repaid in full, and at least a one-day waiting period between loans.


Can I rescind the loan after I take it?

Yes. You not only get 5 days free per calendar quarter, but you can rescind a loan before 6 pm the following business day if you change your mind. You can do this by logging in to the My Account page and repaying the loan in full. If any charges appear, contact customer service at help@rainyday.org to have them reversed.


What happens if I cannot pay back my loan on time?

In order to provide low fees and free days, we count on loans being paid back in full and on time. If you cannot pay back your loan on time, it will have an impact on your Rainy Day account status going forward, and on the account of anyone who recommended you. However, the sooner you pay it back, the less the impact will be. Please get in touch with us as soon as possible at help@rainyday.org and let us know when the money will be in your bank account to avoid NSF fees, and to minimize the impact on your account.


Is there any way to take another loan before I have paid back this one?

Unfortunately, no. Many state laws prohibit more than one short-term loan being issued at a time, and to make sure we are in compliance with all state laws, we do not provide more than one loan at once.


What happens if I don't repay my loan?

The Rainy Day model doesn't work unless virtually all loans are repaid. Without extremely low default rates, we can't provide the low fees, free days, and other benefits that make Rainy Day what it is. So, if you don't think you are going to be able to repay the loan, please don't take one. If you do take a loan and don't repay it, the following things will happen:

  • Your Rainy Day account will be suspended.
  • Defaulting on your loan will have a negative impact on the account of anyone who recommended you, and whoever recommended them (your friends and your friends' friends). This can mean they'll have fewer free days, higher loan fees, the loss of the ability to recommend friends, and lower credit.
  • The default will be reported to credit bureaus.
  • Possible involvement of an outside collection agency.

We really don't want to do any of these things, but the lack of repayment of a loan impacts our ability to lend money to other people who need it. Enough defaults put our ability to lend to anyone at risk.


Do you offer loan extensions or extended payment terms?

In some cases we do, but it will hurt your Rainy Day account status.  Please get in touch with customer service at help@rainyday.org if it is impossible to repay your loan on time. 


Can I repay my loan before it's due?

Yes, and we encourage you to do so if you can. This is part of why Rainy Day is different. As soon as you repay your loan, the daily fee stops, so the loan is much less expensive (and in some cases free) if you repay it sooner than the due date.


Can I repay part of my loan?

Yes. You can repay part of your loan at any point before the automatic repayment date.  However, the daily fee will remain the same until the loan is repaid in full. 


I've forgotten when my loan is due. How can I find out?

We sent you an email with all your loan details, including the automatic repayment date and the amount due. Those details are also listed on your My Account page.