Different Loan Options for the Unbanked

One of the difficulties faced by the unbanked is that it can be tough to get loans. However, even if you don’t have a bank account, you can still get loans in some cases. You do have options for getting the cash that you need. Here are some of the ways you can borrow the money you need:

Payday Loans

Short term cash loans can be found with the help of payday loan companies. These companies will provide you with an advance ahead of your payday. You do need to bring in a pay stub so that the company can see that you are employed. With this evidence, and proof of a valid street address and your identity, you can usually get a loan for a portion of your expected paycheck.

The unbanked can also usually cash their paychecks at these locations. This makes it a little easier to get their cash without needing a checking or saving account at a bank. You will have to pay sometimes hefty fees sto get a payday advance, or even to have your paycheck cashed, at one of these institutions, so be prepared. However, the main advantage is that your credit history isn’t a very big issue.

Peer to Peer Lending

In recent years, there has been a rise in peer to peer lending. Many banks are reluctant to provide loans to people who don’t have accounts with them. If you don’t want to open a bank account to get a loan, you can try peer to peer lending. This is usually done through a web site. You state your case, including the amount of money you need. Then, ordinary people pledge money, usually in increments of $25, to help you reach your goal.

You can get a peer to peer loan with poor credit, but it helps to have fair to good credit if you want funding this way. If you do have poor credit, you can expect to pay a higher interest rate than someone with good credit. But this is still a way you can get a short term loan without necessarily having a bank account.

Credit Cards

Perhaps one of the easiest ways to get a short term cash loan is to turn to your credit card. If you already have a credit card, and you haven’t reached your credit limit, you can usually get a cash advance. This is a loan that you have to pay back, but it’s very easy to do. All you need to do is know your credit card account access number at the ATM, and you can get a cash advance. Transaction fees usually come with cash advances, and you may have to pay an ATM fee as well. On top of that, the cash advance APR is usually higher than your purchase APR.

If you don’t already have a credit card, you can apply for one. However, some credit card issuers require you to have good credit. If you have poor credit, you can get a secured credit card, but that means that you will have to provide cash in advance, and as collateral. This can be a slow and inefficient method of getting the cash you need.

Bottom Line: You really do have options when you are unbanked, but you will need to be prepared a little bit more in interest and fees.

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