By Larry Donaldson
In need of cash but don’t have a checking account? You are not alone. These days, more and more people are being rejected for a new account – and the rejection is not for the reasons you might think (see below).
The taking out of short term loans is on the rise due to many people finding themselves in a cash pinch. The economy, personal misfortune, or just bad planning are all possible reasons why you may be running short on cash.
Here are 5 things you should know if you are interested in short terms loans without a bank account:
1. The vast majority of short term lenders require that you have a bank account.
Most short-term lenders require that you have a bank account. There are three main reasons for this:
a. usually, the lender will want you to write a post-dated check to them so that you can pay them back on your next pay day. And, a check requires a bank account!
b. having a checking account is a symbol your being a responsible person who can pay back the loan.
c. possessing a checking account also allows the bank to establish your identity, which builds trust.
2. Some lenders do not require an account.
There are some lenders who do not require that you have an account. However, these lenders will usually want you to put up some type of collateral in order to potentially cover any risk that your loan represents. And, that is not always easy to come up with.
3. Not having a checking account is frustrating for other reasons, as well:
Lacking access to your own checking is frustrating for many other reasons, besides not being able to get qualified for a loan. For example, having an account allows you to have a safe place to keep your money. It also allows you to write checks and make debit charges at almost any store, gas station, and service provider anywhere. Not only that, but checking accounts also allow you to manage your money through online banking. And, of course, it gives you access to your money through a network of ATM machines located anywhere you go.
4. Chex Systems: the reason you cannot get approved for a checking account.
Applying for a new checking account is a fairly easy process that can take 15 minutes or less. The bank will need to establish your identity and get you set up in their system. But, what if you have applied for one or more checking accounts but been rejected? This is a humiliating and frustrating experience.
The reason that 99% of people get rejected for a new checking account – to the surprise of many people – has NOTHING to do with your credit (FICO) score. Rather, it is because their name has been reported to a database called Chex Systems. Banks use this database to share information with each other about past customers whom they consider a banking risk. Currently, about 80-90% of banks refer to Chex Systems when considering new account applications.
5. Second chance checking accounts allow you to avoid the Chex Systems hassle.
Once your name has been reported to Chex Systems, there is no way to get it immediately removed. However, there is a silver lining to this cloud: there are a handful of banks that do not refer to Chex Systems when considering a new application. These banks are called “second chance checking” banks, for good reason: they give you a second chance when others won’t.
If you are looking for short term loans without a checking account, your best bet is to apply for a second chance checking account first. The approval process can take just minute, and you can find any number of lenders willing to extend to you a new loan.
About the Author: For a list of second chance checking banks in your area, check out: