Do You Need a Bank Account to Apply for an Online Loan?

If you’re considering looking for a loan online, you may be wondering what the requirements are to apply for an online loan. Online lenders often have more flexible criteria than traditional banks, which makes them attractive for people who may not have a perfect financial history. Still, there’s no doubt that it’s easier to get a loan if you have a bank account — but it may not mandatory.

If you don’t have a checking account, you may have to look a little harder to find the right loan, since many lenders send loan funds through direct deposit. However, that doesn’t mean you won’t be able to find a loan that meets your needs.

Here’s what you need to know about applying for safe online loans.

Minimum Requirements for Most Online Loans

As mentioned, some banks or lenders may require a checking account, but not a savings account.

A savings account is a place to save money, just like it sounds. Lenders don’t care too much about whether or not applicants have a savings account unless they plan on using it as collateral for a secured loan.

The reason many prefer checking accounts is that it’s easy to send and withdraw funds. But some lenders have other options.

Some banks may offer alternatives such as a prepaid debit card with your loan proceeds on it, or simply paying and repaying your loan in cash.

With all that in mind, most loans have the same general set of requirements:

  • US citizenship, permanent residency, Social Security number, or long-term visa: Non-citizens may be rejected by some banks, although some of these rejected may be fine if you have a cosigner
  • Be at least 18 years old
  • Provide a permanent address
  • Live in a state where your lender does business: The law says online lenders can only lend to you if they do business in your state. Additionally, rates and terms may vary by location.
  • Verified income source: At a minimum, you’ll need to state your income — if the lender considers your credit score — but not prove it. If they don’t ask for your credit score, you’ll need to verify your income with documentation such as tax returns, pay stubs, or bank statements. Self-employed people and those with variable income levels may need to provide more documentation.
  • Collateral: Collateral isn’t necessary unless you’re getting a secured loan. Secured loans can be a good option for people that don’t have great credit. Also, it may be easier to be approved for a secured loan without a bank account.
  • Loan purpose: Some loans can’t be used for certain purposes. For example, you may not be able to use personal loans for gambling, education, business, or investing in stocks. There are specialized loans for most of those uses.

Notice: Information provided in this article is for informational purposes only. Consult your financial advisor about your financial circumstances.

Source: iQuanti, Inc.

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Categories: Personal and Family Finances

Tags: Financial Solutions, Financial Stability, Loans, Personal Finance