Q:

Can I get a loan without a bank account?

A:

Getting a loan without a bank account is not impossible, but the lack of a savings or checking account rules out loans from most traditional lending institutions like credit unions and banks. HowStuffWorks explains that lenders view a consumer's lack of a bank account as a liability since those who do not have bank accounts are often unable to obtain one due to financial hardship or a bad banking history.

Despite this, there are still a few loan options for those without bank accounts. Payday loans offer a short-term loan option, but borrowers must provide collateral in the form of a vehicle title or proof of income. Some car dealerships also offer loans without verification of bank accounts. In the case of car loans, the vehicle acts as collateral and pay stubs are used to prove a borrower is capable of paying back the loan on time. HowStuffWorks warns borrowers to carefully examine the conditions of these types of loans since some lenders are known to participate in predatory lending practices. In many cases, these types of loans, particularly payday loans, have interest rates as high as 700 percent. Additionally, the repayment periods are often shorter, loan amounts are smaller and some lenders assess stiff penalties, fees and additional interest for late payments.


Is this answer helpful?

Similar Questions

Explore