A Guide to Getting a Short Term Loan without a Checking Account

Sometimes you need to get immediate access to some cash to resolve immediate cash crunch. A basic requirement for it is to have an account in the bank. However, due to increasingly strict rules by the governments, many account applications are getting rejected. With this in mind, we throw light on some facts that allow you to get a short term loan without a bank account.

Need of a bank account

Having an account helps validate your identity easily as well as show you as a responsible citizen in front of the lender. Additionally, the lender takes a post-dated check from you on the dates of payment agreed between you two. This is a guarantee to the lender that he will get his money and interest back on time.

Look for lenders who skip this step

Today, you can find numerous lenders who do not require an account to lend you money. Instead, they require some sort of collateral from you like against your car. This helps mitigate the risk of giving you the loan. Often, these are private lenders, and there could be additional clauses involved. It’s important to read and understand these clauses properly.

Issues faced due to lack of a bank account

Without a bank account, it becomes a little difficult to get you qualified for a loan. Again you do not get any safe place to keep your money, write checks or take care of many kinds of bills like your electricity, gas, water, etc. Additionally, you lose access to various ATMs via which you can easily withdraw money from any location. This minimizes the risk of theft.

Reasons for getting rejected

Often your credit score is not the reason that your account application has got rejected. Application for checking account and procuring it is a 15-minute procedure. After establishing your identity, any bank sets you up in its system. During this process, if your name crops up in a special database called Chex Systems, then your application gets rejected. This particular database is used and shared by all banks and have names of past customers who are looked upon as a banking risk. It’s hard to get your name removed from this list immediately. However, not all banks refer to this list. These are called ‘second chance checking banks’. You can easily open an account here and thus get your loan approved. Paying your loan on time increases your authenticity, and you can soon find your name gets removed from the Chex System.