When you don’t have a bank account, it can be difficult to borrow money. Most direct lenders require a checking account or savings account for direct deposit. So what if you need a fast cash loan? Are there payday loans that accept prepaid debit cards? Keep reading to learn about loan options for consumers that don’t have a bank account.
What Is a Payday Loan?
A payday loan is a short-term loan that provides eligible borrowers with a lump sum of money. The eligibility requirements for payday loans are generally easy to meet.
Lenders may qualify you for payday loans if you meet the following requirements:
- Are at least 18 years old.
- Have a government-issued photo ID.
- Have proof of residence.
- Have proof of employment.
Payday loans are typically easy to get by consumers that have bad credit and need to borrow money. While other unsecured loans require a credit check, you can get a payday loan without good credit. You can apply for online payday loans or visit a brick-and-mortar location. The only difference is the speed of service and how you provide your documentation.
Payday loans work differently than installment loans. Borrowers must pay the money back within two weeks. Payday loan companies automatically roll over a late payday loan. A rollover means you will receive an additional two weeks to pay off your borrowed money plus the cost of a rollover fee.
Borrowing money through a payday loan seems like an ideal solution, right? Unfortunately, consumers pay for speed and convenience through short repayment terms and high-interest rates.
Can I Get a Prepaid Debit Card When I Apply for Payday Loans?
When applying for a loan, most lenders will use direct deposit to send your money directly to your bank account. But what if you don’t have a bank account? You may be able to find a lender that wires money to a prepaid debit card.
Consumers can use prepaid debit cards to pay for expenses or withdraw cash at an ATM. Applying in person at a store location can help you immediately get a prepaid debit card. But applying for a payday loan online means you may have to wait for your prepaid debit card to arrive in the mail.
Some direct lenders may charge a debit card service charge and additional fees for payment convenience. A debit card service charge can be a one-time fee or a monthly charge. If you accidentally overdraw your prepaid debit card, you may get hit with debit card overdraft fees. Ensure you ask for a full disclosure of hidden fees and read the fine print before finalizing the loan process.
Debit card information usually does not influence your credit score because banks do not report payment information to the major credit reporting bureaus. However, a prepaid debit card loan may affect your credit if you do not repay payday lenders on time. Once a lender reports a late payment, your credit score can decrease by a few points.
What if I Lose My Prepaid Debit Card?
Prepaid debit card loans allow eligible borrowers to spend their loan money without a checking account. But what happens if you lose your prepaid debit card?
Consumers must contact payday loan companies once they notice a lost prepaid card. Your payday loan lender will deactivate the card and issue a replacement through the mail. If your lender has a store location, you may be able to get a replacement the same day you report the loss.
Your payday loan lender may offer certain protections against loss or theft. Check your lender’s website or your payday loan agreement. Suppose your lender does not provide loss protection, or you report a lost prepaid debit card too late. In that case, you will be responsible for any unauthorized charges.
If you want to become financially independent, it’s essential to have a bank account. Bank accounts offer financial safety, easy access to your money, and peace of mind. Relying on check cashing services and money orders to pay bills means spending hundreds of dollars a year on transaction fees! You can save money and get convenient financial services with a bank account.
How To Open a Bank Account
Many people decide against opening a checking account at a bank because they are concerned about fees and strict requirements. However, opening a bank account has never been easier! Many checking account options exist without monthly fees, overdraft fees, or minimum balance requirements.
When you open a bank account, you can choose between an online or a traditional bank. Online banks work similarly to traditional banks, except there may be no physical branch locations. Account-holders can transfer and deposit money at an ATM or using the bank’s mobile app.
You will typically need to provide the following information to open a bank account:
- A government-issued photo ID
- Initial deposit (not always required)
- SSN or ITIN
- Contact information
You can open a checking account online or at a local branch. Applying online can take minutes, and you can start banking right away. A bank account allows you to pay bills easily, deposit money, write checks, receive direct deposits, and more. It’s important to set financial goals, and a bank account makes it easy to set money aside for future purchases or financial emergencies.
Alternative Options to Payday Loans
Debit card payday loans are convenient for many people that don’t have bank accounts. Still, they may not be an ideal financial option. Financial experts often advise consumers against taking out instant payday loans online due to predatory lending practices.
Payday loans are a convenient financing option because good credit is not required for approval, and they provide fast money through prepaid debit cards. However, payday loans have extremely short repayment terms and high-interest rates. Many people end up stuck in a debt spiral due to payday loans. It may be best to consider alternative finance options if you need emergency cash.
There are two ways to get money through a bank. Apply for a loan or request a debit card cash advance. A debit card cash advance withdraws money already in your checking account. You can apply for a loan if you need a significant amount of money to pay car repairs or rent. Eligibility for bank loans largely depends on your credit score, but you could get lower interest rates.
A personal loan is more convenient than a payday loan because they offer decent interest rates, extended repayment terms, and higher loan amounts. You do not need perfect credit to qualify for personal loans. You may get approval if you have a bank account and proof of repayment.
You can take out a cash advance to pay unexpected expenses if you have a credit card. Just withdraw cash from an ATM using your credit card. However, most credit card issuers limit the amount you can withdraw. This amount is typically a small percentage of your available credit line. If you have maxed out your credit card, this may not be an option. In addition, credit cards have high-interest rates. A cash advance may only be beneficial if you have decent rates and only require a small amount of money.