Everyone knows how important maintaining a good credit score in this day and age. Your credit score is like your financial trustworthiness report, and shows lenders, potential creditors, and other businesses how well you handle your bills. Of course, sometimes, our credit reports don’t reflect the fact that sometimes circumstances beyond our control can make it difficult to pay our bills sometimes.
Things like medical emergencies and other factors can really put a dent in your plans to pay your bills on time. Many creditors and lenders can understand that, but one thing that will really be scrutinized if you apply for a loan with bad credit is your bank account. If you don’t currently have a bank account, then this could only compound the problem that you face when trying to get a loan with bad credit.
There are always options, however, and all hope is not lost if you don’t currently bank with anyone. You could find options for the best loans for people with bad credit & no bank account of 2020 by checking out lending networks online. It is important to remember that you might run into one little snag; you may need to apply for and get approved for a bank account before some lenders will approve a bad credit loan.
Why do most lenders require a bank account for bad credit loans?
This isn’t just something that you will face for bad credit loans. Almost all lenders require loan applicants to have a bank account, no matter what their credit score looks like. One of the biggest reasons for this is that the biggest majority of lenders use direct deposit to send your loan money on approval of the loan.
That’s right, it’s pretty hard to find a lender that will just send you a check anymore. Of course, if you have bad credit, the biggest majority of your lending options are going to be found online, using useful lending networks such as Let Me Bank to help match you with the best lenders for your situation.
If you’d like to make sure you can get approved for a bad credit loan through one of these lenders, then you should do everything you can to try to open a checking account. Of course, if you had a previous bank account closed due to unpaid overdraft fees or something else, then you might find that some banks won’t open an account with you, due to possibly being flagged by the ChexSystems banking background system.
This doesn’t mean you’re out of options, though. If you need a loan and are currently not banking with any financial institution, you do have some options to consider.
Prepaid Debit Cards
If you don’t have a bank account but would like the ability to receive money through direct deposit, along with all of the benefits a debit card offers, you could consider a prepaid debit card. Many prepaid debit cards come with mobile apps to monitor your spending and manage your account from your phone, and also support the ability to receive money via direct deposit.
These also add the extra benefit of not having to go through a ChexSystems background check when applying. Also, you have no worries about putting yourself in further debt using a prepaid card, because it is funded with money you already have. This means you will not have to deal with overdraft charges and similar fees.
Local Loan Options
If you are unable to get a prepaid debit card and are unbanked, you still may have options to get your hands on the loan you need. Check for local payday loan businesses or local lenders who deal with car title loans.
- Payday loans are usually a smaller amount that require repayment in a matter of weeks to a month.
- Car title loans require you to put up your vehicle as collateral, meaning the lender can repossess your car if you aren’t able to repay your loan.
If you end up going this route, make sure you are going to be able to pay the loan back before you sign any papers, because both of these options can carry some risk all their own. The upside to this option is that, for people who don’t have a bank account, these local brick-and-mortar locations may be able to write you a check that you can cash.
If you don’t have a bank account, don’t think you have no recourse should you find yourself needing a loan. Without a bank account, it can be a little tricky, but as you can tell from above, you do have options. Consider these options carefully if you need access to money now and are unable to get approved for a bank account.
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