Borrow money and have it loaded onto a debit card, not your bank account.
Sometimes it’s the little things that prevent you from getting a leg up in a financial emergency. When you’re looking for a little cash to bridge the gap between paydays, not having a valid bank account for direct deposit could prevent you from getting a loan.
But that trend is changing. Today, you’ll find short-term lenders combining access to fast cash with the convenience of a prepaid debit card. These debit cards are typically branded with Visa or Mastercard, offering the flexibility to pay bills or swipe for necessities at retailers nationwide.
Here’s what to know about prepaid debit cards that can help you access your loan funds without a bank account or strong credit.
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How does a prepaid debit card loan work?
With a prepaid debit card loan, you apply for your short-term loan either online or in a store. If you’re approved, your lender transfers your approved funds into an eligible loan account. It then registers a prepaid debit card with that account, either handing it to you in person or mailing it to your home.
You’ll typically need to register the card in your name, either in person, by phone or online. Because most prepaid cards are either Visa or Mastercard, you can then begin using your card as you would any other type of credit card. Use it at retailers, utilities or even ATMs to withdraw your cash — wherever and whenever you need it.
Can I reuse the prepaid card for another loan?
Yes. If you need a loan in the future, you’re often able to receive your funds on the same card for a fee, sometimes even with a different lender.
And you’re not limited to receiving only payday loans to your debit card. You can often set it up to receive direct deposits, providing quick access to your paycheck, government benefits or tax refunds.
Compare more short-term loan options
Top 6 reasons to consider a prepaid debit card payday loan
A prepaid debit card offers the flexibility to discreetly spend your payday loan funds anywhere your card is accepted. Here’s what we consider the top six reasons you might benefit from this type of loan:
- You don’t always need a bank account. With a prepaid debit card loan, your lender deposits your approved funds onto the card for immediate use.
- You can easily access your funds. Once your lender transfers your money to your card, you can use it to shop for groceries and more at stores, pay your bills online or over the phone, even withdraw cash at an ATM.
- You can set up your card for other deposits. Most prepaid cards can receive direct deposits, offering a way to quickly access to your paycheck, tax refunds and government benefits.
- You could earn rewards with the right card. Some prepaid card providers allow you to earn cash rewards with your spending.
- You can choose from multiple lenders. If you live in a state where payday loans are legal, you’ll find lenders to choose from. Compare the ease of applying and turnaround to find the best option for your needs.
- You can use your money however you’d like. What you do with the loan is up to you. Use it for car repairs, forgotten bills or to get by until payday.
What are the benefits and drawbacks to consider?
How a prepaid debit card can help
- No bank account required. You’ll find lenders that approve loans for borrowers who don’t have a bank account.
- Poor credit is OK. As long as you can demonstrate your ability to repay your loan, your credit score isn’t the biggest factor for approval.
- Quick access to funds. Most lenders can transfer your money by the next business day. If you’re a repeat borrower, you may already have the prepaid card to load your funds.
What to look out for
- High fees. Payday loans charge considerably higher fees than other types of loans, resulting in a costly form of credit.
- Short repayment terms. As the name implies, your loan is typically due on your next payday. Make sure it won’t strain your budget too much before you apply.
- Disreputable lenders. Plenty of shady lenders are out there trying to take advantage of people at their most vulnerable. Confirm that your lender is licensed and operates legally in your state before signing a contract.
Other considerations to keep in mind
Before you apply for a prepaid debit card payday loan, consider how you’ll repay it. Among the most notorious types of lending, payday loans often come with high fees and interest rates. Late or missed payments can lead to additional fees and stiff penalties. And default can result in a lower credit score and long-term damage to your overall credit.
Prepaid debit card payday loans are governed by state regulations that limit how much you can borrow and for how long. These laws are designed to protect you against predatory lending. Carefully review the terms and conditions of your specific loan, and ask questions about anything you don’t understand before signing any contract.
To protect yourself against an illegitimate lender, confirm that yours is licensed and allowed to lend in your state.
How to apply for a prepaid debit card loan
Depending on the lender, you’re often able to apply for a prepaid debit card loan online or in person.
To apply for a payday loan:
- You must be a US citizen or permanent resident.
- You must be at least 18 years old (or the age of majority in your state)
- You must be able to prove a steady source of income.
When applying, you typically must submit:
- Your name and personal contact information.
- Your Social Security number and date of birth.
- Government-issued ID, such as your driver’s license.
- Your employment status and income details.
Can’t I have my loan funds deposited into a friend’s account?
No. You need to have an active bank account in your name — not just any bank account. Lenders typically check this before approving your application. If you don’t have a bank account, one of your options is applying for a small-dollar loan loaded on to a prepaid debit card.
What do I do if my application is denied?
Applying through a loan connection service could increase your chances of approval, as these providers have a large network of lenders that offer loans with varying eligibility criteria.
A lender could deny your application for a number a reasons. Common rejection reasons include: living in an ineligible state and not having sufficient income. If you’re denied because of your state of residence, visit our payday loan state directory to find loan options available in your state. If you’re denied because of insufficient income, consider looking at lenders who accept applicants who are unemployed or receive welfare.
Can I really get a loan without a bank account?
Possibly. While many lenders push bank accounts so they can debit payments on the due date, electronic transfers are by no means the only way to receive loan funds or repay them.
Payday lenders are typically more concerned with your ability to repay the loan. If you can provide proof of income, they’re less likely to be concerned about your lack of a bank account.
How can I receive loan funds without a bank account?
There are two ways you can receive the funds from your loan without a bank account: through a prepaid debit card or in-store cash pickup. Your funding options will vary by lender, but these alternatives can provide an easier borrowing experience.
Payday lenders that offer alternative ways to receive funds
|Online or in-store||Maximum loan amount|
|Cash Central||Online, request a prepaid card to load funds onto when you apply or get funds loaded onto your eligible prepaid card||$5,000|
|Check into Cash Title Loan||Both, you can start the application online but you must pick up your loaded prepaid debit card or cash in-store||Depends on the car appraisal and your state of residence|
Prepaid debit card explained
A common alternative to bank deposits is getting your funds on a prepaid debit card. A prepaid card can be handy because you can use them at a wide range of stores. You may also be able to withdraw cash at an ATM, though this might incur extra fees.
Payday lenders that offer prepaid debit cards will either mail the card to you or let you pick it up at a nearby location after your loan has been approved. You may also be able to use an existing prepaid card. Be sure to check with the lender for any restrictions.
Benefits of prepaid debit cards:
- They’re reloadable. If you’ve already had a payday loan on a prepaid card, you may be able reload the card with a new loan. Likewise, you can also load funds that aren’t related to the loan.
- They’re reliable. Prepaid cards are often issued under Mastercard or Visa, two trusted and widely accepted brands.
In-store cash pickup explained
Many payday lenders offer cash if you apply in person, and some even allow you to apply online and pick up your loan in person.
When you go into the store to apply, be sure you have your proof of income ready. Without the ability to show bank statements that confirm your financial situation, you may need to produce pay stubs or other employment details.
The benefits of in-store cash pickup include:
- You can get funding quickly. The in-store application process doesn’t take long, and after approval, you can get the cash within a few minutes.
- Personal assistance. When you apply in-store, you can work with an associate to craft a repayment plan and get help with the application process.
Prepaid debit card vs. in-store cash pickup
|How to apply||Turnaround time|
|Prepaid card||Primarily online, sometimes in-store||1–3 business days|
|Store||Primarily in-store, sometimes online||As soon as the same day|
Can I get a loan without a bank account if I have bad credit?
It depends. Payday lenders tend to look beyond your credit score to focus on your ability to repay the loan successfully. Outside of repayment ability, payday lenders usually base their decisions on your age, state of residence, if you have a valid form of photo ID and if you’re an active member of the military.
Short-term loans available for people with bad credit
How 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 paycheck to paycheck. But you can actually save money if you find the right bank. A bank account can open you up to better loan options with lower APR and fees. It also can help you manage your monthly bills and make payments easier.
Before you open an account, assess your needs to see which bank works best for you. Some offer no monthly fees or minimum balance, while others are good for travel offering 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 the steps to opening an account:
1. Gather your documents
- ID. Social Security card, drivers licence, passport or birth certificate is acceptable.
- Proof of address. Lease or utility bill with your name on it.
- Deposit. This will vary by bank, but you’ll need somewhere between $25 and $100 to open an account.
For opening 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 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, register for direct deposit, autopay and 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 and more.
You don’t need to have a bank account to get a payday loan. Your options may be limited, but you can find lenders willing to work with you.
Whether you decide to get a prepaid debit card loan or cash from a storefront, it’s important to consider how you’ll be able to repay it. Missing payments or defaulting on the loan will lead to extra fees and charges on top of possibly damaging your credit. Be sure you’re able to repay whatever you borrow quickly before you sign a contract.