A 2019 statistic claims that 7.1 million families in the USA do not have a bank account. Obviously, you struggle to get a loan if you are also one of them. Most lenders want a bank account.
So, how can I get a loan if I don’t have a bank account? Banks and other lenders are less likely to sanction loans without a bank account. Still, you can get a loan from friends and family, pawnshops and online lenders. Also, you can ask for title or payday check-based loans. By the way, are personal loans considered income?
Here, top credit experts discuss all these approaches.
Why Is a Bank Account Important to Get a Loan
Here, we make you understand how a bank account matters to get a personal loan.
- After approval, the loan amount comes to your bank account.
- It shows you can manage money and make payments.
- A bank account is essential to make automatic loan payments.
- It helps confirm your identity and address.
- A bank account statement helps the lender to know where your money comes from and where it goes.
Effective Ways to Get a Loan If You Don’t Have a Bank Account
Hence, how can I get a loan if I don’t have a bank account? In this section, we provide a detailed answer. Furthermore, know the requirements for a personal loan.
Taking a Loan from Friends and Family
If you don’t have a bank account, taking a loan from friends and family is a suitable choice. We suggest you list your close friends and family who are healthy. Next, visit them individually and explain the issue of taking a loan from any bank or financial institution.
Offer them a standard interest rate. You will surely be managing a loan. But remember, you must pay them back on time. If you don’t, it will harm your relationship with that person. So, it’s important to be responsible and keep your promises. Moreover, get the differences between a personal loan and a credit card.
Taking a Loan from a Pawnshop
Take any valuable item from your belongings. It can be a firearm, an expensive painting, electric devices, etc., with a resale value. Visit all of the local pawnshops to get the best deal.
To give you an idea, you can get 20%-50% of the item’s resale value as a loan. Depending on your city’s location, the APR can go up to 35%-40%. Payoff the loan as per agreed terms; otherwise, the pawnshop will sell your item to others. Besides, is a personal loan variable or fixed rate?
Online Lenders
You can also check this option as well. Several online lenders do not require a bank account but a mobile money app account. Upon approving your loan application, they transfer the funds to that particular mobile money app.
In this way, you can expect to get a maximum of $5,000, and the APR can go up to 34.99%. So, think carefully before taking this option. Before going for this option, you must ensure your monthly income is sufficient. Also, is LendingTree good for personal loans?
Taking a Title Loan
This is a lucrative option if you are struggling to secure a loan due to not having a bank account. With a title loan, you offer one of your valuable possessions as security in exchange for a loan.
Typically, you can borrow an amount equal to 25% to 50% of the item’s value. For instance, if you use your car as collateral and it’s worth $15,000, you can expect to receive a maximum loan of $7,000. Below are some facts about a title loan that you must know.
- If the collateral is a car, the lender will install a GPS tracker just in case you can’t repay the loan. If you can’t repay the loan, the lender can take your car.
- Title loans often come with very high interest rates. In some cases and locations, these rates can reach as high as 300% to 400%.
- Title loans are for a very short term. You can expect to get a term of 30 days or a maximum of 60.
Taking a Loan based on Paycheck
It is more like a title loan. But here, the collateral is your next month’s paycheck. There are several local lenders who will lend you money based on your next paycheck. These unofficial lenders ask for no bank account. You can get 20%-50% of the paycheck amount as a loan. Here, the APR ranges from 18.99%-35%. Moreover, get a personal loan without income proof.