In most cases, having a checking bank account is a prerequisite to apply for a personal loan. Hence, many creditors can turn down your applications for financial products if you don’t own one.
Luckily, even if you have no checking account or wonder how to improve your credit score after Chapter 7, you have loan options left. But the available cash advances you can choose from, such as payday or installment loans, can be a costly alternative.
Below we’ll elaborate on why it’s hard to take out a cash advance with no bank account. Plus, you’ll get familiar with the types of loans you may qualify for and other solutions to consider.
Do Cash Loans Require a Bank Account?
Popular as payday loans, these financial products avoid credit checks and bank account approvals. The only thing you must prove is sufficient earnings to repay the loan between one and four weeks. Once approved, you will have the money at hand within a business day.
An average cash loan entails an APR of 400%. Finance charges vary by state and equal about $15 for every $100 borrowed if you pay on time. If you can’t service your debt with your next paycheck, the lender will roll over the loan.
Can I Get a 1-Hour Payday Loan Without a Bank Account?
About 14 million Americans don’t have a bank account, so you’re far from alone. Indeed, you have a few options when it comes to getting a fast loan. In most cases, you can get a cash advance with no bank account as long as you meet other requirements. The underlying criteria include earning a minimum regular income each month.
Still, short-term loans that don’t require bank accounts come with higher interest rates and can worsen your financial situation. Hence, it’s essential to research all your options before getting into a cycle of debt.
Most payday lenders serve only borrowers with a bank account to pull funds from it if you default on the loan. Creditors that don’t require a bank account will charge high interest and fees to square up the risk. Plus, you’ll probably face more stringent requirements when having your income verified.
Get a Payday Loan With a Prepaid Debit Card
Borrowers without a checking account can get a prepaid debit card. In this case, the lender will send the approved money to prepaid debit cards. Go for an online lender to keep track of your balances and work with your cash advance better.
In addition, some payday lenders load money onto prepaid debit cards of borrowers without a bank account. This process is similar to payday lending. The main difference is that you get your money on a prepaid debit card and not into credit cards. Yet, as with any short-term loan that disregards credit scores, the interest rate can reach triple digits.
How Do Direct Deposit Payday Loans Work?
Direct deposit payday loans are very popular—for many applicants, they are the first product that comes to mind. Yet, lenders transfer direct deposit payday loans online into bank accounts. So, there’s no need to pick up checks in person or wait for them to come through the mail. Also, this option isn’t available to applicants without a bank account. When your payment is due or on your next payday, the lender automatically withdraws the owed amount from your bank account.
Will Lenders Check My Credit Score?
Some creditors approve cash advance loans without running a credit check. Instead, they only reject loan applications they deem too risky. These lenders are willing to compromise for a higher rate of return. In this case, the only way to ensure they’ll get their money back is to ask for collateral. Or lenders can impose a higher rate or extra fees in exchange for the risk no credit check loans carry.
As for a payday loan with no credit check, you will probably face higher APRs and charges. While this may seem shocking, it is the only approach for the lender to consider your request without reviewing your credit history.
Finally, those who want to avoid granting access to their credit report should provide supporting documents. Lenders will require proof of income to ensure you can repay the debt. Check before you apply for a loan to see what income can boost your approval odds. The more proof you submit, the more likely you’ll get a loan.
Options and Requirements for Getting a Bank Account
If your local bank rejects you for a checking account, you still have alternatives. First, you can apply for a no-fee checking account. Though rare, some banks offer checking accounts with no monthly, ATM, or even overdraft fees. The basic requirements are minimum income and an opening deposit as low as $5 at credit unions.
Second, consider savings accounts that accept your disbursed funds. You generally won’t have to meet stringent requirements or care for monthly payments. Plus, you may even earn some interest in the money you keep. Still, regular withdrawals might come with costs.
When you decide to open a bank account, keep the following requirements in mind.
- Identification document,
- Proof of address,
- Deposit between $25 and $100 to open the account.
Alternative Solutions to Payday Loans Without a Bank Account
As a general rule, short-term loans come with many charges. Often, the interest rates are too high to make them a sound financial choice. However, if you’re in an economic dead-end and need access to quick cash, here are some alternatives to consider.
Some CDFIs offer payday loan alternatives that don’t require a bank account. To this end, the money gets loaded on prepaid debit cards. The downside of CDFI loans is that they can be hard to find and might take longer to approve. Since CDFI are local financial institutions that serve poor areas in a handful of states, you’ll have to look nearby. But if you succeed, the savings could be worth the extra time.
To get considered, you must live in an eligible state, have a steady income, and have a debit card to receive bank transfers. The maximum loan amount caps at $2,000, while the typical APR ranges from 10% to 30%.
Bad Credit Personal Loans
You’ll probably make a wiser decision with a bad credit personal loan than with any cash advance. Several lenders specialize in bad credit loans and offer checking accounts to people with a bad banking history. Once you have a bank account, you can look for online lenders that offer bad credit personal loans.
If you have collectibles or antiques accumulating dust, consider a pawn shop loan. This way, you’ll use your item as collateral to secure the loan. Anyways, don’t forget that you can lose the item if you default. Also, interest rates can be high and vary depending on the lender and where you live.
With a car title loan, you must put up your car as collateral. Then, you must payback in as little as one month to get your vehicle back. Unfortunately, the APR can be very high, and extra fees can increase the total cost. The ultimate risk is that you will lose your car if you can’t repay your loan.
Credit Card Cash Advances
With a credit card cash advance, you borrow against your existing credit card and then pay it back over time. You’ll start accruing interest right away, so it’s vital to pay off the balance on a short note.
You need a bank account to qualify for better-termed financial services. Without it, your options get limited when it comes to cash advances and payday loans. While many lenders offer them, the high interest rates mean it’s usually better to seek more favorable alternatives.