Although your credit rating is unimportant when applying for a payday loan, and income requirements are often low, you will usually need some form of bank account to receive the money, make payment or both. The following are the most common options for a bank account.
A checking account
There was a time when payday lenders utilized a post-dated check for the purpose of repayment. The lender would give the borrower cash in exchange for a check made out for the amount borrowed plus interest and fees written with the payment date. When the date arrived, the check was cashed. Today, it is commonly done electronically. Although you can still elect to get cash, it can also be deposited directly to your checking account. When the payment day arrives, the lender will withdraw the payment directly from your checking account. This is the most popular banking option for a payday loan. The downside is that not everyone has a traditional checking account, and there are obstacles to open one such as minimum deposits, making them impractical for many people.
A prepaid debit card
If you don't have a traditional bank account, this is a good option. Many people are not aware that a prepaid debit card is a bank account. Along with your card, you will have an account number and a routing number. This routing number can be used to transfer funds directly to your debit card as well as take payment from your card. Although there is a monthly fee associated with prepaid debit cards, there are no requirements to obtain one. In fact, some payday lenders will provide you with a prepaid debit card and fund your account with the payday loan. Prior to payment for the loan, you will have to add sufficient money to the debit card to cover the electronic withdrawal by the payday lender.
No bank account
It is possible to get a payday loan without any bank account at all. Most lenders will demand more information from the borrower and more time will be spent verifying employment and income. In addition, you may be required to pay a higher interest rate. Some payday lenders offer a check cashing service, and if you are a regular customer, it may be easier to get a payday loan without a bank account than a new customer. The lender knows you have steady income and are a steady customer.
Although the requirements for approval of a payday loan are minimal, the bank account issue can be a stumbling block for many applicants. If you need to get a payday loan (from an outlet such as EZ Money) for your emergency needs, there are many possibilities for banking options, including no bank account at all. Before applying for a loan, always inquire about a lender's bank account policies.
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