Consider applying for a debit card loan for a quick and convenient way to receive funds.
Even if you don’t have a bank account, you can still get access to a payday loan through a prepaid debit card. This option gives you fast access to your loan money without the need for a bank account or great credit.
Read on to learn the ins and outs of prepaid debit card loans.
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How does a prepaid debit card loan work?
You can apply for a prepaid debit card loan either online or in-store.
If you’re approved, the lender will transfer your funds into your loan account. Online applicants will have to wait for the card to arrive in the mail, but once you have it, you’ll have access to your money whenever and wherever you need it.
If you need a loan in the future, you can use the same card, though this might come with an extra charge. On top of this, you aren’t limited to using your prepaid debit card to receive payday loans. You can set up most prepaid cards to receive direct deposits, giving you quick access to your paycheck, tax refunds and government benefits.
Most prepaid cards are either Visa or MasterCard so you can withdraw money from your card at most ATMs and spend it wherever the brand of the card is accepted.
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These loan-matching services focus on trying to connect you with a lender that might be able to provide you the funds you seek based on your preferences and the lenders’ criteria.
Top six reasons to consider a prepaid debit card payday loan
There are a number of features that come with payday loans including:
- You don’t need a bank account. With prepaid debit card loans, you can have the funds deposited onto the card.
- You’ll get easy access to funds. Once the funds are transferred to your card you can withdraw money from an ATM, shop at stores that accept prepaid cards and you may also be able to spend online or over the phone.
- You can receive other funds on the card. You aren’t limited to using your prepaid debit card to receive payday loans. You can set up most prepaid cards to receive direct deposits giving you quick access to your paycheck, tax refunds and government benefits.
- You may earn rewards. Some prepaid card providers let you earn cash rewards when you use your card.
- Multiple loan options to compare. If you live in a state where payday loans are legal, you’ll have a number of lenders to compare and choose from. The time it takes to process applications and disburse funds varies by lender, so it’s in your best interest to compare your options.
- You can use the funds for any purpose. What you want to do with the loan is up to you. You can use the money for car repairs, forgotten bills, or to just get by until payday.
What are the benefits and drawbacks of prepaid debit card loans?
- No bank account required. You can find lenders who approve loans for borrowers without a bank account.
- Bad credit is OK. As long as you can demonstrate your ability to repay, your credit score won’t be the biggest factor in being approved.
- Quick access to funds. Some lenders can transfer your loan to you on the day you apply, although you may need to wait until the next business day. The process is generally quicker when you are a repeat borrower as you already have the prepaid card to reload.
- Higher fees. Payday loans charge considerably higher fees than conventional loans, making them a costly form of credit.
- Short repayment term. You’ll generally have to repay your loan on your next payday, so make sure it won’t put too much of a strain on your budget before you apply.
- Disreputable lenders. There are plenty of shady lenders out there that may try to take advantage of you. Always confirm that a lender is licensed and operates legally before signing a contract.
What you should know about prepaid debit card payday loans
Before you apply, establish how you plan to repay your loan. If you think you might not be able to repay it on time, you should reconsider taking out a loan in the first place. Not paying on time means you will pay additional fees and charges, and it can also have a negative effect on your credit rating.
Make sure the lender you deal with has a valid license and is allowed to lend in your state. Review the terms and conditions before accepting any contract.
State regulations govern how much you can borrow and for how long. Because a prepaid debit card is still a payday loan, they will have much higher fees than a traditional loan from a bank or credit union. If you don’t think you’ll be able to repay, avoid taking out the loan in the first place. A late or missed payment can lead to extra fees and may damage your credit.
How to apply for a prepaid debit card loan
Applications can be submitted online or in person.
- Be a US citizen or permanent resident
- Be at least 18 years old (varies by state)
- Have steady source of income
- Your name, date of birth, address and email
- Your Social Security number and state-issued ID
- Details about your employment status and income
Are payday loans available in your state?
Frequently asked questions about prepaid debit card payday loans
How much time does it take to apply for a debit card payday loan?
The application process should take no more than 10 to 15 minutes if you have all the required information close at hand.
Can anyone apply for a payday loan?
You can apply as long as you have a steady source of income and you’re a permanent resident of the US. You’ll also have to meet your state’s minimum age requirement and whatever other criteria a lender has.
Can I get a prepaid debit card loan if I receive SSI, welfare or unemployment benefits?
Yes. Some lenders may accept alternate forms of income when evaluating your loan application. You can visit the lender’s website or call its customer service line to confirm eligibility.
Payday loans are not legal in my state. Do I have any other options?
Are there any fees with debit card loans?
Yes, but it varies by lender. You may have to pay reloading fees, interchange fees, setup fees and ATM withdrawal fees. It’s important to check these before you apply.
Is my information safe when I apply?
The majority of short term lenders use 128-bit security encryption to ensure your details are kept safe. Look for the padlock icon in your browser.