Without a chequing or savings account, your loan options become rather limited. Alternative services could be a way for you to bridge your financial gap, without needing to head to your local bank to open an account. Read our guide to learn how you can get a loan without having to own a bank account.
Can I really get a loan with no bank account?
Yes. However, taking out a loan without having a bank account will likely cost you more money in interest than the average personal loan with a bank account. That’s because many of your options fall into the category of loans with short terms. These loans are called by a variety of different names including payday, auto title, pawn, debit card and signature loans. These loans are expensive because of fees and excessively high annual percentage rates of interest (APRs).
Having a bank account, however, opens the doors to more lenders who could potentially help you qualify for competitive rates, especially if you have a good to excellent credit score.
Why do lenders generally require that you have a bank account?
When lenders review your application, they like to see how much money you have in your bank account to get an idea of how you handle your personal finances. A bank statement can easily provide this information. What’s more, the lenders can clarify that you have an income, which will tell them that you are capable of paying back the amount you wish to borrow.
Bank accounts also make it easier for lenders to transfer your requested funds quickly. These days, most lenders in Canada use electronic fund transfers (EFTs) to give you your loan and collect repayments. An EFT works only between bank accounts.
Furthermore, a bank account can show lenders that you’re financially healthy and not a borrowing risk. The less of a risk you are, the better the chance you have for approval and competitive interest rates.
Options for getting a loan without a bank account?
Without a bank account, you’re generally limited to short-term options. Auto title and pawn loans typically require collateral, while other options don’t.
4 questions to ask to find the right loan option
There’s not one “best” loan out there. Answer the following questions to narrow down your loan options and get a better idea of where you might want to start looking.
Do you own a car that you’d be willing to use as collateral?
Do you have personal items of value you’re willing to part with – such as precious gems, gold or expensive electronics?
Yes. Pawn shop loans might be the way to go – though you’ll lose that item if you can’t pay it back.
No. Skip the pawn shop.
Do you own bitcoin?
Yes. While they come with risks, it’s possible to get a loan in cryptocurrency. Look into a bitcoin loan.
No. You might still qualify for a bitcoin loan without a bank account by buying cryptocurrency through PayPal with a prepaid debit card. However, it could take more time than other options.
Are you willing to consider opening a bank account?
Yes. Take one more look at bank account offers. Even if you’re retired, unemployed, banned from your current bank or undocumented, there may be banking options for you.
No. If you’re sure you can’t open a bank account – or just don’t have the time or want to – you might want to go straight for a loan that’s secured by collateral.
This short-term loan option allows people who might not meet personal loan requirements to borrow against the value of their cars. You can often take out loans up to 50% of your car’s value, although you can occasionally find loans for up to 90% of its resale price. Some lenders don’t require a bank account if you apply in person.
With a title loan, you put your car’s title up for collateral, rather than the vehicle itself. This means you’re able to drive it around while you’re repaying your loan. However, if you aren’t able to pay it back, you’ll lose ownership of your car.
Collateral makes you less of a risk to your lender, which often means better interest rates than you’d find with a payday loan, however title loans are still expensive.
Consider calling the provider ahead of time to make sure you can qualify without having a bank account.
General eligibility. You must be a Canadian citizen or permanent resident who’s at least 18 years old, or the age of majority in your province or territory. You must also possess a car title in your name and have proof of a consistent income.
Maximum loan. Typically up to 50% of your car’s value.
Typical APR. Usually around 50%.
How to apply. Take your car’s title to your lender and complete a quick form. You’ll need to drive in your car for an appraisal before you can collect your loan in cash, as a cheque or by money order. Some lenders may even give you a prepaid debit card.
How long it takes. As little as one business day.
That loan might take longer to repay than you think.
A high APR on a payday or title loan might not cost much if you can repay it on time. However, it can become expensive if you choose to roll over your loans or take out a new loan to pay it off later.
Before taking out a loan, ask yourself how likely it is that you can repay your loan on time. If you struggle with your finances, consider contacting a credit counselling agency before taking out a loan. A credit counsellor can explain your options and help you come up with a recovery plan.
Pawn loans
Rather than sell and buy back your personal items, some pawn shops let you put up your valuables for collateral on a loan. With a pawn loan, you borrow a percentage of your item’s resale value – normally 25% to 60% – repaying it in cash, after which your items are returned to you.
Rates tend to be high, although they are sometimes negotiable depending on the lender. Typically, you’ll have a few months to pay it off.
General eligibility. You must be at least 18 years old, or the age of majority in your province or territory, and own an item of high resale value, like jewellery, gold or electronics.
Maximum loan. Around 60% of your item’s value.
Typical APR. Varies widely, though it’s often less expensive than a payday or title loan.
How to apply. Get your item appraised online, and take your item and appraisal to the pawn shop. Complete a quick form to get your cash, along with a ticket to reclaim your item after repaying your loan.
How long it takes. Typically no more than one day.
Debit card loans
By definition, these loans don’t involve sending cash to a bank account. Instead, your lender loads your funds onto a prepaid debit card in your name, which you can pick up at a store or receive by mail. You’ll need proof of a bank account to qualify though. The convenience here is that you don’t have to have funds deposited or withdrawn from your bank account if you don’t want to.
These cards can encourage repeat borrowing, offering an easy way to sign up for future loans. Some even allow you to earn rewards as you would with a credit card.
Most lenders offering debit card loans are payday lenders, meaning that the same payday restrictions will apply if this is the case. Payday loans are regulated at the provincial/territorial level, so APRs and fees will vary.
General eligibility. You must be a Canadian citizen or permanent resident who’s at least 18 years old, or the age of majority in your province or territory. You must also possess a car title in your name and have proof of a consistent income.
Maximum loan. Varies by lender and your financial situation.
Typical APR. Can be 50% or more.
How to apply. Complete an application online or in a store.
How long it takes. As little as one day.
Bitcoin loans
If you don’t have a bank account, another option might be to repay a term loan entirely in bitcoin, thanks to lending platforms like BTCPOP. Here, investors fund your loan and collect on repayments, rather than a bank or online lender.
If you’re already an expert in cryptocurrency, you’ll understand the risks better than someone who’s new to the game. Otherwise, this borrowing option might not be for you.
Why not? For one, bitcoin is not a stable currency. Its value changes by the minute and the Government of Canada treats it as a type of investment, like stocks or bonds. It’s impossible to predict how much your coin will be worth tomorrow, let alone when your loan is due.
General eligibility. You must have proof of ID.
Maximum loan. Varies by lender.
Typical APR. Varies by lender.
How to apply. Set up a BTCPOP profile, post a request for funding and wait for investors.
How long it takes. As little as one day.
Payday loans
Payday loans are designed for people who can’t qualify for a personal loan due to bad credit or a missing eligibility requirement – like a bank account.
If you apply in person, some lenders will let you pick up and repay your funds in cash or by money transfer.
Knowing which payday loan you should apply for depends on how much money you need. If you need more than $1,500, a traditional payday loan might be the way to go – you pay it back in full the next time you get paid plus a fixed fee. This is why it is known as a payday loan.
Payday loans are available in all provinces and territories across Canada, however the regulations differ, therefore APRs, fees and other terms can vary.
General eligibility. You must be a Canadian citizen or permanent resident who’s at least 18 years old, or the age of majority in your province or territory. You must also possess a car title in your name and have proof of a consistent income. Depending on the lender, you may also need a bank account.
Maximum loan. Typically up to $1,500 for traditional payday loans, however it can be much less or sometimes more.
Typical APR. On average $17 per $100 borrowed.
How to apply. Go in person to the payday lender, complete a quick application form and get your loan in cash or by money transfer.
How long it takes. As little as one day.
What are my options if I want to get a bank account?
If you don’t qualify for a chequing account at your local bank – or you just don’t want to pay their fees to open one – you do have alternatives.
A no-fee chequing account
Some banks offer chequing accounts with no monthly, ATM or even overdraft fees. It’s even possible to find a bank that doesn’t charge a fee for international money transfers. Some banks will offer free chequings accounts if you have other products with them like an investment account, credit card or savings account.
Since each bank has its own requirements, check to see how you can meet the requirements for a no-fee chequing account. You may also need to meet a minimum income or opening deposit – though this can often be as low as $5.
Savings accounts
Some lenders are willing to work with borrowers who only have a savings account, as long as it can accept your funds. You generally won’t have to meet as many requirements or pay monthly fees in order to open a savings account at a bank. In fact, you could earn a small amount of interest on the funds you keep there.
Having a savings account opens up your borrowing options slightly. However, regular withdrawals might also come with fees, making it difficult for you to use it as a chequing account.
4 steps to get a bank account
You may have avoided getting a bank account because banks can charge high fees and it can be difficult to manage if you’re living paycheque to paycheque. However, you can actually save money if you find the right bank. A bank account can open you up to better loan options with a lower APR and fewer fees. It also can help you manage your monthly bills and make payments easier.
Before you open a bank account, assess your needs to see which bank works best for you. Some offer no monthly fees or minimum balances, while others offer benefits like free international ATM withdrawals. Explore your options before you decide on a bank account.
If you find a bank account that’s right for you, follow these steps to open an account:
1. Gather your documents
ID. Social Insurance Number, drivers licence, passport or birth certificate.
Proof of address. Lease or utility bill with your name on it.
Deposit. This will vary by bank, but you’ll need somewhere between $5 and $100 to open an account.
To open an account online, you’ll need to scan any documents and make the deposit using a debit or credit card or make a transfer from another account.
2. Fill out the application
Whether online or in person, you’re required to fill out an application. In order to approve your account, the bank runs a credit check, checking on your banking history. If you’re approved for the account, you’ll be given your account and routing number along with other account information.
3. Read the fine print
Remember that opening a bank account is allowing someone else to care for your money, so be sure you understand the bank’s policies and fees. Read through any paperwork looking for extra fees and when your funds are available for withdrawal.
4. Manage your account
Once you make your initial deposit, keep up with what you spend so you don’t overdraw your account. Most banks have online accounts or apps where you can check your balance, pay bills, send money and generally manage your money.
Bottom line
It’s possible to get a loan without having a bank account. Although your options are more limited, your main options include auto title loans, pawn shop loans and bitcoin loans.
However, you might want to reconsider your bank account options before you apply. Most competitive lenders require borrowers to have an active chequing account to verify your finances and have a place for deposits and repayments.
Frequently asked questions
Yes, but you’re generally limited to dealership financing. Your income is often more important than maintaining a bank account. So if you can provide other proof that you have money coming in, you might qualify.
Much like personal loans, your options with no bank account are typically more expensive and can come with downfalls that you might not find with a typical personal loan.
No. Most lenders require income, but you might find a loan without a job. If you receive alimony, unemployment benefits, disability or other monthly payments, you may qualify for financing with some lenders.
Anna Serio is a lead editor at Finder, specializing in consumer and business financing. A trusted lending expert and former certified commercial loan officer, Anna's written and edited more than 1,000 articles on Finder to help Americans strengthen their financial literacy. Her expertise and analysis on personal, student, business and car loans has been featured in publications like Business Insider, CNBC and Nasdaq, and has appeared on NBC and KADN. Anna holds an MA in Middle Eastern studies from the American University of Beirut and a BA in Creative Writing from Macaulay Honors College at Hunter College, CUNY.
Read our guide to payday loan regulations in your province or territory.
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