You Can Apply For These Loans Without A Bank Account
Many loans require you to provide proof of your bank account as part of the document screening process during application, but what if you don’t have one?
If for whatever reason you don’t currently have an account with a recognized bank, you can still apply for certain types of loans without bank account verification. In this article, we’ll cover a comprehensive list of financing options that don’t necessarily require proof of a bank account from their applicants.
Is A Bank Account Absolutely Necessary To Get A Loan?
If you read through the documentary requirements on many lenders’ websites, you’ll notice that they tend to require proof of residence, employment, and banking before your application can proceed.
- The recent adoption of ‘know your customer’ regulations to prevent fraud and illegal activities means that many banks and large financial institutions will require a long list of documents before issuing loans to new customers
- However, if you don’t have a bank account and a strong credit history, there are still many lenders you can approach for financing. Smaller institutions and non-bank lenders may be less stringent about their documentation requirements
Let’s take a closer look at some of the credit providers you may want to consider.
Five Lending Options That Don't Require Traditional Bank Accounts
The following categories of lenders are known to provide loans with quick approval times and don’t necessarily require proof of banking as part of their application process.
If you need to borrow a small amount of money that you’re able to repay out of your next paycheck, you may want to consider this type of lending product. However, it’s wise to be wary of the risks involved with this type of lending product.
- Like the name suggests, a payday loan is a type of short-term financing that’s usually quick to obtain. You’ll typically apply for one at your local loan shop, but many lenders now offer online applications in the wake of COVID-19
- One important thing to note about these loans is that they tend to be characterized by significantly higher APRs than almost any other type of borrowing
Bad credit can make it difficult to qualify for a loan, but if you have an asset like a car to use as collateral you may be able to get approved for financing if you don’t have a bank account.
- Title loans are a special type of lending that requires you to pledge your vehicle as a guarantee for the financing amount. This can help you receive approval for the loan and you may also qualify for slightly lower APRs
- It’s important to note that using your vehicle as collateral means that if you don’t repay your loan on time and end up defaulting, your credit provider could repossess your car
Your local pawn shop may be an option to consider when looking for a bad credit loan without a bank account.
- Like payday lenders, pawn dealers are short-term credit providers. The dealer will first determine the value of the item you want to pawn before offering credit for between 20% and 50% of its value
- These businesses tend to operate on a less formal basis than banks and large non-bank lending organizations. You’ll just need to provide an item of value to borrow against and some basic information like your name and address
Organizations that are members of the Community Development Financial Institutions network may offer lending options that don’t require a bank account. Here’s how this type of financing operates.
- CDFI members tend to be located in rural America or Native American reservations. Since they’re recipients of development funding, they can offer personal loans with lower interest rates. Some lenders offer products known as tribal loans which operate similarly to payday loans. However, because they aren’t regulated like ordinary banks, they might charge very high interest and you have no way to sue if something goes wrong
- It’s important to remember that not all CDFI loan companies are willing to waive the bank account requirement. Before you apply for financing from one of these organizations, you’ll want to contact the lender and verify the exact documents they require
Peer-to-peer (P2P) lending is an excellent option for tech-savvy borrowers who are able to wait longer than a few days for loan approval.
- This type of financing requires you to register on a P2P website, fill out a profile detailing your personal details and the amount you require, as well as the reason you’d like to borrow funds
- The P2P loan provider will match you with an investor who may be willing to lend the required amount. This process can take up to two weeks or longer in some cases
The Bottom Line
Not having a bank account can make things difficult when it comes to applying for credit, but it doesn’t have to be a dealbreaker. By exploring the options on our list above you may be able to secure the loan you need without having to provide extensive financial documentation.
Alternatively, you could consider opening a savings account at your local bank and apply for a bad credit personal loan.