Some people hesitate to take out a loan since one of the requirements for a personal loan is a checking account. However, there are still loan options that allow individuals who do not have a bank account to acquire a loan.
Although very limited, the options exist, and you can study each of them to know whether you can afford to acquire one or not.
If you have a property under your name, you can consider taking a title loan. Whether it is a car or a house, you can use it as collateral for the loan you are taking. Lenders provide this option to help individuals without a bank account to acquire extra cash if they need it.
Your property will serve as your loan’s security to ensure lenders that you will repay the money you borrow plus its interest rate. In case you default, the lender will have the right to seize the property offered as collateral as payment for your debt.
The most common and popular title loan is a car title loan. The lender can loan the borrower up to 25% of the car’s total value. Title loan length is from 15 to 30 days or longer, and the borrower is required to pay the title loan in a single payment.
A payday loan is another option you could consider. If you are not familiar with a payday loan, this is a loan that provides cash quickly, but you have to pay it back, in full, on your next payday. Although some payday loans require a checking account there are still lenders who do not require a bank account. You will have to look for a payday lender that will allow you to take a payday loan even without a bank account.
However, you will need to satisfy additional requirements such as a minimum amount of income. Your income should be enough to pay the principal amount of the payday loan plus the interest rate without compromising your other needs. Once you establish this, the payday lender will consider your application.
The first place you should go to look for a payday lender who considers providing loans to individuals without a bank account is online. There are so many online payday lenders that aren’t that strict as long as you prove to them that you can pay the loan you are taking along with its fees.
A pawnshop loan is a type of loan that most borrowers do not consider. They do not know that this type of loan is often cheaper than a payday or a title loan.
You will have to go to the nearest pawn shop with a valuable item you own to offer as collateral to carry out a pawnshop loan. These things can be jewelry, firearms, digital equipment, or musical instruments.
The pawn lender will assess the value of the item you are offering and give you a loan based on the item’s value. The more valuable the item you offer as collateral, the bigger the amount you can borrow. In case you fail to pay the borrowed money, the pawnshop lender will repossess your item as a payment for the loan.
Pawn Shop loans are best for individuals who do not qualify for a personal loan. It also has no legal requirement to repay, which means that your credit score will not suffer if you fail to repay the loan. You will also not get harassed by any debt collectors or get sued in case of default.
Consider Borrowing From Family Or Friends
Although options are available, having no bank account can cost you more. Without a bank account, you will be left with these limited options that have a higher cost. If you do not want to take the risks of a higher interest rate or do not have valuable items or property to satisfy the options mentioned, maybe it is time to seek help from your family and friends.
Although most financial advisers do not recommend this option, you can still consider it, especially in real emergencies. However, when borrowing money from family and friends, make sure to create an agreement and write it down on paper. Make sure to follow the terms of the agreement and pay the money on time. It is also best if you offer an interest rate to make it more formal and less personal.
Remember that a bank account is where lenders can access your financial history for the past 3 months. A good bank record means that you can repay the loan you are getting as they will also see how much money you deposited on your account each month. If you are among the 7.1 million Americans households who do not own a bank account, then you have to choose amongst these limited options.
Start Choosing Now
If you currently need extra cash on hand due to an emergency, it is best to choose amongst the provided loan options. Having no bank account should not stop you from acquiring help from lenders. What you need to do now is to choose the best option for your individual situation.