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Can I Get a Bad Credit Loan with No Checking Account?

About 4.5% of US households are unbanked. This means that nearly 6 million people do not have a bank account, and if they ever need to take out a loan to cover an emergency expense, they might face certain difficulties.

If you don’t have a checking account, you may be taking your paycheck to a special check-cashing store, paying all the additional fees, and paying the bills in person or through the mail. This is a hassle, but you’re used to taking all these additional steps. However, if you have never tried to get access to fast cash without a bank account, you might be in for an unpleasant surprise.

Why is getting loans with bad credit and no checking account so difficult and is there a way for you to get help if you ever find yourself in the middle of a financial emergency? The good news is that there are a few options for you to choose from, so keep on reading.

Key Takeaways

  • With technology and unsecured loan options, you can get a loan without a bank account.
  • Title loans and payday loan lenders will be able to give you a loan without a registered bank account. Credit cards are another option.
  • Getting a loan without a bank account presents logistical problems to lenders. They need a way to track and transfer funds.

Is It Possible To Get a Loan with No Checking Account?

Yes, it is possible to get a loan without a bank account because some lenders offer alternative options such as payday loans, title loans, or pawnshop loans, which do not require a bank account. But you should remember that for these options, you will be limited and loan costs might be quite expensive.

Bear in mind that when applying for an unsecured loan without a bank account, the lender would most likely have to take a look at your credit score and history. The expert will request your credit report to find out how you have handled any credit accounts in the past, how much debt you have at the moment, and a few other things.

Those who want to avoid a credit check might choose to go for a secured loan. Those are the loans that are backed up by some form of collateral. For example, when taking out a title loan, your vehicle’s title will be used as collateral. If you fail to repay a secured loan, the lender has the right to repossess your car.

Why Is It Hard to Get a Loan with No Checking Account?

When you apply for a loan, the lender would usually ask you to provide some basic information about yourself, including your bank account information. Applicants typically have to provide their bank statements from the last few months.

But why do lenders need this information? The answer is pretty simple. Being a lender has always been risky as there is a percentage of borrowers who end up not repaying the loan.

Before the lender agrees to give you the money, the representative needs to determine whether you’re a risky borrower or not. Those who do not have a bank account will, most likely, be automatically viewed as a higher risk. That is because the bank statements help the expert verify your income so that the company has an idea of whether you’re capable of repaying.

This might seem like the most obvious reason why plenty of applicants with no bank account get declined by lenders. But there are also a few other not-so-obvious issues that need to be mentioned.

Your Credit Score Is Most Likely Low

The chances are high that those who do not have checking accounts also don’t have an excellent credit score. Though bank accounts do not directly affect your score, they can be used to assess your debt-to-income ratio and other important factors.

Lenders that do request a credit report will not get all the information they need from that document as the report leaves out the information about checking account balances, any certificates of deposit, bonds, and other investments. That’s exactly why the company would also ask you to bring in a bank statement so that they can get a fuller picture of your financial status.

From the lender’s perspective, if the candidate does not have a checking account, it feels like the applicant is trying to hide something which, of course, is always a red flag.

Your Lender Doesn’t Know Where To Send the Loan Amount

This is not the biggest factor that plays a role in determining whether or not you’ll get qualified for a loan, but it’s certainly worth mentioning.

If you do not have a bank account and you get approved, the lender will face a logistical issue. For example:

  • Where will the company deposit the loan amount?
  • And, most importantly, how is the borrower going to pay the loan back without a bank account?

Though the majority of lenders have the option of receiving the payments in their offices, there is always a risk that you’ll simply not show up when the time comes to repay. 

Loan with no bank account

Where Can I Get a Loan with No Checking Account?

Loan Option Description Advantages Disadvantages

Title Loans

  • Secured by the title to your vehicle.
  • Failure to repay results in losing the vehicle.
  • Secured loans are seen as less risky by lenders.
  • Possible with bad credit.
  •  Quick approval.
  • Short-term (usually 1 month).
  • High risk of losing your car.
  • Can end up paying more than the initial amount.
  • The vehicle must be owned outright.
Mobile Apps Borrow small amounts through apps usually linked to your bank account.
  • Convenient, apply on the go.
  • Some apps may not require a bank account.
  • Flat fees or subscriptions.
  • May require bank account information.
  • Subscription or fee required.
  • Limited loan amounts.
Cash Advance with Prepaid Card A loan is provided on a prepaid debit card instead of a bank account.
  • No bank account is needed.
  • Quick access to cash.
  • Easy application process.
  • Limited lenders offer this option.
  • High fees and interest rates.
  • Cash advance fee.
Payday Loans Short-term loan, typically repaid with the next paycheck. Requires ID and recent pay stub.
  • No collateral is needed.
  • Available with bad credit.
  • Quick access to cash.

High interest rates.

Risk of falling into a debt cycle.

Limited loan amounts.<br>- Short repayment period.

In a nutshell, any option that you decide to go for will be risky. But if you urgently need to get access to fast cash and you understand all the risks, then you might want to consider going for one of the following:

Title Loans

A title loan is secured by the title to your vehicle. If you fail to repay, the lender will take your car away. As the title acts like a guarantee that you’ll repay the loan, lenders tend to view secured loans as less of a risk. And even if you have bad credit and don’t have a bank account, they might still agree to work with you.

You should be aware of the fact that title loans are generally short-term loans. This means that the amount needs to be repaid in about a month. If you fail to repay, you would have to reborrow or extend the loan, and you can easily end up paying a lot more than the initial loan amount.

Furthermore, title loans might simply not be an option for most people as to apply for one you must own the vehicle outright. The vehicle’s title cannot be used as collateral, in case you’re still making payments on your car, and thus, you’ll be declined.

By the way, if you have jewelry, electronics, or any other valuable items lying around your house, you might be able to get a pawn loan. You will be offered a percentage of the value of the item by the pawnbroker, and if you don’t pay the loan back, the pawnshop will take your item away and sell it.

Mobile Apps

There are special mobile apps that let you borrow a small amount, but to use them you would typically have to be the client of the bank that has created the app or provide your bank account information.

To be able to use such an application, you would usually be asked to pay for a subscription or to take care of a flat fee. There can also be an optional tip that you can cover.

The main advantage of such an option is that you can apply for a loan on the go. If you’d like to avoid going to the lender’s store and gathering dozens of documents, then you might want to opt for such an option. But, once again, the chances are high that you’re going to need your bank account information.

Cash Advance with a Prepaid Card

In some cases, you can use a prepaid debit card to get a cash advance. Only a small number of lenders offer such an option, so you would have to do your research to find a reputable service provider in your area.

The way such a cash advance works is pretty simple. You apply for the loan, provide some basic information about yourself, and the lender then decides whether you qualify for approval. The main difference between a regular loan and a cash advance with a prepaid card is the fact that the money would be put onto your debit card, not your checking account.

If you have a credit card, you might manage to get a cash advance using your credit card account. There are plenty of different forms of this lending option. The most popular form of a cash advance is withdrawing cash directly from an ATM using your credit card.

The biggest downside of such an option is that it’s very expensive. A cash advance does not come with a grace period and you would typically be asked to pay a cash advance fee. The latter can be between $5-$10 or more which might not seem like the biggest amount, but if you’re borrowing only $100, that’s at least 5-10% of the overall sum.

Payday Loans

If you don’t have a bank account, you might also be able to apply for a payday loan. Some lenders would ask you to bring in only your ID and most recent pay stub. You wouldn’t have to provide any form of collateral and you can typically apply even if you have bad credit.

Just as the name suggests, a payday loan is generally repaid with the next paycheck. So, it might take you only a few weeks to fully pay the loan off. You wouldn't manage to qualify for thousands of dollars with such an option, but you might be able to get your hands on a few hundred bucks in case of an emergency.

This short-term lending option is expensive. Furthermore, if you fail to repay the loan on time, the lender will offer to extend the loan. This will lead to additional expenses.

Risky But Entirely Possible

Getting a bad credit loan with no bank account is not impossible, but it would certainly be more challenging than applying for a regular loan.

The easiest way to show the lender that you’re not a risky borrower is by backing up the loan with collateral. That’s exactly why a lot of people who do not have a checking account prefer to go for a title loan. But remember that you would have to have a lien-free title to apply for one.

All the other individuals are left with such options as payday loans and cash advances with a credit or debit card.

No matter what type of loan you decide to go for, make sure to weigh up all the pros and cons before signing any papers. If you manage to repay the loan on time, it might turn out to be quite helpful, but those who fail to fulfill their financial obligations can easily end up in a vicious circle of debt. 

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