If you’re struggling to build or repair your credit, you know the vicious cycle all too well. You need money to pay for, well, life, and some of those payments require credit. But with a bad credit score or no access to a bank account, you may find yourself stuck without an option. So, you fall behind on your payments, which means your credit score gets even worse.
A personal loan can help ease this kind of financial burden by allowing you to finally get ahead. A small windfall can help you pay off existing debts or cough up a down payment on a necessary investment. And although nobody likes to pay money just to have money, there are some fee-free checking account options that can help you access the loans you need.
Here’s what you need to know to get your hands on that loan you need and turn your financial landscape around.
Can You Get a Loan Without a Bank Account?
Maybe you’ve already been searching for a loan for some time, but you’ve realized you’re missing an important requirement: a bank account. Most online lenders necessitate a bank account to initiate the transaction as part of their eligibility prerequisites. (You may also have to meet other requirements, such as proving you meet a certain income threshold or holding permanent U.S. residency or citizenship).
And while there are certain loans you can get if you don’t have a bank account, they tend to be short-term loans with very high interest rates, such as a payday loan or car title loan. And in most cases, you want to avoid them.
What Are Payday Loans and Why Should You Avoid Them?
A payday loan is a short-term loan (usually 30 days or less) with towering interest rates (up to 400% or even higher). Traditionally, a payday loan was due to be repaid on your next payday, which is where it gets its name.
Payday loans are available from a wide variety of vendors, including storefronts, where it’s easy to walk in and secure your loan check the same day. However, just because the money is easy to come by doesn’t mean it’s a good idea! Payday loans often put borrowers even further behind when they find they can’t repay them. And even if you can, you’ll have paid more in interest than you need to.
Why Installment Loans Are Better
Installment loans, on the other hand, are a type of fixed-interest loan. They’re repaid regularly (usually monthly) over a longer period of time, such as one to three years. Although your exact terms will depend on your creditworthiness, personal installment loans don’t tend to have the same insane interest as payday loans do. You might find one for about 20% APR (and sometimes as low as 5% for very creditworthy borrowers).
What’s more, installment loans are available for much larger loan amounts than payday lenders offer since they’re repaid over a significant portion of time. For example, a payday loan might cap out at $1,000, but it’s easy to find personal loans for $10,000 or even higher.
While we certainly don’t recommend taking out more debt than you need, those higher sums may actually help you lift yourself out of revolving credit card debt or other less-than-ideal financial scenarios. On the other hand, a payday loan of $500 or $1,000 rarely will and certainly won’t be worth the hundred bucks or more in interest you’ll pay to get it.
Fee-Free Checking Accounts
Unfortunately, it’s difficult to find a legitimate personal loan lender who doesn’t require a checking account. In fact, all of the online lenders we’ve listed below do.
Paying a maintenance fee each month just to keep a bank account open is no fun, especially if you’re not in a financial situation where that $10 or $15 is significant to your budget. (And hey, even if you earn a lot, ten bucks is ten bucks!)
But thanks to the internet, you can find a variety of online-only checking options that are actually real-deal free, with low account minimums and no monthly service charge. One of the most well-regarded of these is Chime.
There are plenty of other no-fee checking accounts available for those willing to forego the sticks-and-bricks bank. And once you sign up, you’ll be eligible to take out the unsecured loan you need!
Best Installment Loans for Bad Credit
Even if you don’t have a great credit history, these financial institutions may have a personal loan that’ll suit your needs. Some of them can even let you know if you qualify without a hard credit check which will save you from making your credit even worse.
Operating “at the speed of life,” MoneyMutual understands that sometimes, you need cash right now. That’s why you can get your bad credit loan of up to $2,500 in as little as one business day after your application’s been accepted.
There are no minimum credit score requirements and you can be approved even if you’ve been involved with bankruptcy or other serious credit hassles.
- Loan Amount: Up to $2,500
- APR: Variable
- Term: Variable
2. Cash Advance
Personal loans from Cash Advance are on the smaller end of the spectrum. They generally cap out at $1,000. However, they still offer longer repayment periods of up to a year and much more reasonable rates than you’d find at a typical payday loan vendor.
- Loan Amount: $100-$1,000
- APR: Variable
- Term: Variable
Combining available loans of up to $50,000 with affordable monthly payments and low fixed rates, Upgrade has a one-page application that you can fill out in a flash. Better yet, once you’re approved, the funds will be sent directly to your bank account within a day of clearing any necessary institutional verifications.
- Loan Amount: $1,000 – $50,000
- APR: 7.99% – 35.89%
- Term: 36 – 60 months
4. Lending Club
Lending Club offers personal loans of up to $40,000 with generous repayment terms, allowing you to chip away at the total over the course of up to five years. In addition, depending on your creditworthiness, you may be able to secure a loan with an interest rate below 10% APR.
- Loan Amount: Up to $40,000
- APR: 6.95% – 35.89%
- Term: 36 – 60 months
With bad credit loans ranging up to $30,000, OneMain is the perfect place to secure the personal loan you need. You can use it for debt consolidation, dealing with an unexpected life event, or even home renovations. After completing the easy online application, you’ll be invited to meet a loan specialist in person to nail down the exact terms of your agreement.
- Loan Amount: $1,500 – $30,000
- APR: 16.05% – 35.99%
- Term: 24, 36, 48 or 60 months
Although living debt-free is obviously the ideal scenario, we all know life is sometimes less than ideal — and in ways that can be pretty darn expensive! Fortunately, if you need fast cash, these vendors can help you find the personal loan you need, even if your credit isn’t quite where you want it to be. (Yet.)