Can I Get a Loan Without a Bank Account?
Underbanked borrowers, or those who often rely on cash rather than checking or savings accounts, are often the least priority of most lenders. Chances are, if you don’t have a bank account, you might not have repayment history and credit score. Without these two, lenders won’t have any reassurance that they’ll get paid back.
Fortunately, there are alternative lenders that make all possible efforts to make cash available to any people who are in need. With the help of these lenders, you can get financial aid even without a bank account! Here are three loans you can take out without a bank account:
Bitcoin Loans
Bitcoin lenders don’t check a borrower’s credit score or debt-to-income ratio. What’s more interesting is that they also offer bitcoin short-term loans and bitcoin lines of credit—two unsecured loans that are impossible to take out if you don’t have a bank account.
A bitcoin loan is the same as a standard loan. You’ll have to pay back the money you borrowed plus fees and interests over a predetermined repayment period. Its interest rates are even lower than other unsecured loans.
The funds from bitcoin loans come from the bitcoin users themselves, not financial institutions. They aren’t affiliated with any banks or central government. You’ll get the loan through a peer-to-peer platform, such as BlockFi or Bitbond.
However, going through a platform requires some fees. You can alternatively deal with individual bitcoin dealers or find lenders through online forums. It’s just that doing so can either put risks on the borrower or the lender or both.
Other drawbacks you’ll have to consider are that bitcoin loans have a high default rate and are currently lacking regulation. Bitcoin’s currency is volatile, as well. If you exchange a bitcoin loan to another currency, you can owe your borrowed money several times due to fluctuating exchange rates.
While bitcoin loans have lower interest rates and tend to have higher approval rates, they are high-risk but can potentially be a high-return game. Bitcoin loans aren’t generally for inexperienced borrowers.
Home Collection/Doorsteps Loans
Gone are the days when payday loans can’t be granted to unemployed, out-of-work, and underbanked borrowers. Even without a bank account, you can take out a payday loan called ‘doorstep’ or ‘home collection’ loan.
As its name implies, the borrowed money you’ll receive and your repayments will be handed over in your house personally, not through any bank transaction. Every week, a local agent will go to your house and collect your weekly repayment.
A doorstep loan’s transaction is quick but not as fast as a quick cash loan. You might be wondering, ‘what is a quick cash loan?’ Simply put, it refers to any financing that can be processed within or less than one hour.
You can easily apply online for a doorstep loan. Even so, you still have to wait for a local agent to visit your house and discuss the loan offer. That may take a day or more.
The lenders will still have to undertake credit and affordability checks before granting you a doorstep loan. But, more often than not, lenders will consider your application regardless of your financial capability.
That’s why this small, unsecured, personal cash loan is widely favored by borrowers in the United Kingdom and some countries in Asia who have poor credit and no bank accounts.
CDFI Funds
CDFI is a private sector that’s usually composed of banks and credit unions. They could obtain support and fundings through the U.S. Department of the Treasury. That said, it is controlled locally, without intervention from the national corporate hierarchy or even the federal government.
CDFI funds are designed to serve borrowers who are locked out of the financial system. Hence, unlike other lenders, it doesn’t solely rely on credit scores and focus on a pure profit motive. Plus, CDFIs offer loans at a 10-24% interest rate, saving you hundreds of dollars in interest.
Since it’s designed to promote financial inclusion and economic development, CDFIs are generally capable and flexible institutions. They’re more willing to work with borrowers to understand their individual circumstances.
For example, if you don’t have a bank account, they will more likely ask why than immediately deny your application. Depending on your situation, they might even aid you in opening a bank account or grant you some cash on hand. They even accept non-traditional collateral forms, like any of the borrower’s valuable possessions, regardless of their monetary value.
To locate a CDFI credit union or bank in your community, visit the CDFI Fund website.
Takeaway
Opting out of keeping a traditional bank account is not a serious issue, as opposed to having no money at all. You can still live your life even if you have to make payments in cash or take out your salary from a check-cashing store.
However, having no account can become a real burden when you experience a financial emergency and need immediate financing. But with these loan options, you wouldn’t have to look too far for help.
