Loans You Can Get Without A Bank Account
It’s already difficult to go through life without a bank account: You can’t store money anywhere but, in your mattress, in a cookie jar, or in a treasure chest buried in the back yard. You have no recourse if you get robbed and your cash is taken, and if your company pays you with a paper check, the bank or Wal-Mart or wherever will take a percentage of your hard-earned money for the privilege of giving it to you.
But what happens if you need a loan? Where will you place the money when you receive it? The bank may be wary of giving you thousands of dollars in cash. The banks typically require an account so they can have a record of your financial habits, where your money comes from and where it goes. You may have thousands of dollars buried under your rose garden, but the bank does not know, nor care. They want to see your financial history in addition to your credit score.
If you have a bit of time before you absolutely need cash loans without having a bank account, you may consider applying for a credit card. Many banks do not require that you have an account at their institution to qualify for a credit card.
Many credit cards offer what is called a cash advance in which you can receive cash from your credit card’s credit limit. One thing about a cash advance is that the interest rate for using this option is higher than using the card for reasonable spending purposes. There are also fees associated with this.
One short-term loan option for a person without a bank account is from a pawn shop. This would require collateral from you that has a value above the amount of the loan you are seeking. This would be a type of secured loan. If you fail to pay it back in an agreed upon time frame, you lose the item you put up as collateral, and the pawnbroker can sell it in his shop to recoup the loan. Because of this, make sure the thing you put up as collateral is not something you cannot live without or is otherwise irreplaceable.
A similar option would be a title loan. If you own your car, you can use it as collateral on a loan. You put up your vehicle’s title, basically the document that says you own that specific vehicle, and if you can’t pay the loan off, they can repossess your car.
A payday loan is a loan in which you borrow a typically small amount of money with the intent being that it will be paid back, with a large amount of interest, within a few days, ostensibly, payday. These do not generally require a bank account as sending money to a bank can take time, from either immediately to a day or two. The reason payday loans exist is that the borrower needs money right now and cannot wait for a bank to process a check, wire, or direct deposit.
Direct Deposit Debit Cards
A new product that has come out in recent years is the non-bank checking account. These are accounts that you cannot be turned down for. The most famous of which is Bluebird by American Express. These can be found in Wal-Mart stores in the rack of gift cards. These are technically a checking account you purchase in a store.
You purchase the card, make an initial deposit, and are given your own routing and account number to use along with the card so that an employer or loan institution can deposit money onto it for you to use without a formal banking relationship. Accounts like this are perfect if you need to store a large sum of cash or you find a lender who will only send money to a checking account.
Depending on why you do not have, or possibly, do not want, a checking account, you may achieve the same goal by opening a checking account, apply for a loan, pull out all of the loan proceeds, and the close the account once you have paid off your loan.
These options are available and can allow you to borrow money without a bank account, however, be careful. These types of financial institutions charge higher interest rates for their services, as they know they are a service of last resort.
Having a bank account opens up a financial world of opportunities, while life can be navigated without one, it is difficult.