Living without a checking account can make a lot of everyday financial tasks, like borrowing money, harder.
Most legitimate online loans come from financial institutions that insist you have a bank account. Without one, you can still get fast cash in a pinch, but you can expect to jump through a lot of hoops to get it. There’s also a good chance you’ll pay more.
Why Do You Need a Bank Account to Get an Online Loan?
For practical reasons, you need a bank account when you borrow a loan online because this funding transfers money digitally. Unlike in-person options, you can’t receive your online installment loan or line of credit in cash.
Many financial institutions also require you to have a bank account because of their underwriting process.
A financial institution may look at your bank account to verify your income, which they assess to determine if you can reasonably pay them back according to their terms.
A regular source of income joins other requirements they check, like age, credit score, and even location.
Where you live may play a role in what you need to show before you’re approved for a loan online, as your state determines what a financial institution can ask its borrowers.
That means if you live in Texas, your qualifying requirements may look different than those of someone living in Alaska.
Wherever you live, legitimate financial institutions want to see you have an active bank account.
By sticking to reliable online loans in Texas (or your state of residence), you’ll confirm you’re borrowing from a financial institution that follows the law.
What Are No-Bank Account Loans?
A loan that doesn’t need a bank account comes in many forms—some of you might be familiar with it already.
Personal Loans
Have you ever asked a loved one for money? Borrowing from family or friends is one of the oldest ways of getting a loan without a bank account. People have been doing it for as long as money has existed.
Unfortunately, borrowing from people you know can come with a steep price. According to a recent survey, 53% of people had seen a friendship end over money.
Pawn Shops
If you’ve ever watched the old reality TV show Pawn Stars, you might already have an idea of how you can get these fast cash loans. Pawnshop owners may lend you money if you have an item of value and let them keep it until you pay them back.
This setup can be challenging in many ways.
- You need an item worth borrowing.
- Pawnbrokers tend to apply a lot of interest to make it worthwhile.
- There’s also a chance a pawnbroker may sell your item if you can’t pay off your loan.
In-Person Loans
Finally, some lenders offer loans without requiring a bank account. However, they usually only offer title or payday loans, which come with short terms and high fees.
They may also require you to provide collateral, or an asset to secure your loan. Collateral offsets the risk these lenders take by overlooking bank accounts, but you could lose you’re belonging if you can’t repay what you owe in such short terms.
Bottom Line
While you can technically find ways to borrow money without a bank account, these options usually come with higher payments.
You also lose the security of borrowing from a registered and legitimate online financial institution. In the end, opening a checking account might be the easiest option when you need a loan.
