Personal Loans for People with Bad Credit and No Checking Account
18 Oct, 2016 / By Jennifer Hamilton
Banks determine if you are eligible for a loan by your creditworthiness. If you have bad credit, obtaining a loan can be very tricky. If on top of that, you don’t have a bank account; it’s even harder to get a loan. However, all hope is not lost; it is still possible to get a loan with bad credit and no bank account.
Loan From a Traditional Bank will be Hard
Trying to get a loan without a bank account and bad credit from a traditional bank is difficult. Even if you are granted a loan, it will be at an extremely high interest rate. The terms of your loan will also be limited. The amount you can borrow will be small, and you will most likely only be granted a personal loan or a student loan, since house and car loans are considered too risky for a person with bad credit. In certain cases you could be granted a salary loan if your income is high enough to repay it.
The Use of Collateral
In the sticky situation where you have bad credit as well as no bank account, you may still borrow money from an alternative lending agency if you are able to put up collateral. This collateral must have value, such as a car or your house. Not all lending agencies will offer this policy so shop around to find one that does.
Improve Your Credit to Obtain a Loan
Getting the loan you want may be too difficult with bad credit and no bank account, but by improving your credit score you can better your chances of getting a bigger loan with a lower interest rate. The best way to improve your credit history with bad credit is to borrow small amounts of money and immediately pay it off. Because this small loan will be settled in such a short period of time, you will not have to pay a huge interest fee, and your credit will improve dramatically. If you use this strategy you must be prepared to lose a relatively small amount of money from interest, but your improved credit standing is well worth it. If you are in need of a large amount of money in the future in which good credit is essential, this strategy is useful.
Pawn Shop Loan
If you are in need of quick cash, a pawnshop loan can come in handy. To get a pawnshop loan, you must have a luxury item of considerable value that you can put up as collateral. Pawnbrokers will generally not you down due to your bad credit because this collateral secures their loan. Traditional pawnshops do not require a credit check, and usually will provide liquid cash, so it is an ideal option for those with no bank account and bad credit. Pawn loans can be quite flexible, with many shops allowing for short-term loans without the use of a bank account, as well as a longer repayment period in monthly installments. Repaying a pawnbroker usually requires payments in cash given directly to the pawnshop, which makes it ideal for a person without a bank account. It is important to make sure that the pawnshop you choose is reliable, and has a good reputation for handling your luxury item as well as your loan in the proper manner.
Payday loans are based only on your ability to repay the loan. This means that credit scores are not checked, and many credit loan agencies offer loans without the need of a bank account. Applying for a payday loan will also not affect your credit history unless you fail to repay the loan. Payday loans come with the downside of having extremely high interest rates, and short repayment terms, so make sure this is a good option for your specific situation.