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Loan providers Must Determine If customers Have the Ability to Repay debts That Require All or a good many obligations is repaid immediately

ARIZONA, D.C. – The Consumer Financial safeguards agency (CFPB) today completed a guideline definitely targeted at preventing payday loans traps by requiring lenders to determine initial whether someone are able to settle their own financial loans. These powerful, common-sense defenses protect financial loans that want people to repay all or most of the debt at the same time, including payday advances, car subject loans, deposit advance goods, and longer-term financial loans with balloon money. The Bureau unearthed that lots of people taking on these financing end up over and over paying expensive expenses to roll-over or refinance alike financial obligation. The guideline also curtails lenders’ recurring attempts to debit payments from a borrower’s bank-account, a practice that racks right up costs and can trigger membership closing.

a€?The CFPB’s latest tip places a stop into payday debt barriers which have plagued communities across the nation,a€? stated CFPB movie director Richard Cordray. a€?Too often, consumers who need rapid cash end captured in loans they can not afford.

If you live in one of the nine million unbanked households in the U.S., then you understand the added financial stress of living without a checking or savings account. You have to take your paycheck to a check-cashing store just to get your money-plus whatever fees they decide to charge; you have to pay all your bills in cash through the mail or in person, which is a way bigger hassle than doing them online. The list goes on.

And if you don’t have a checking account, the odds are good that you don’t have great credit. While a bad credit score doesn’t necessarily mean you’ll get denied for a bank account, the kinds of behaviors that tanked your score can also lead to your account application being rejected.

So what happens if you have a financial emergency and you need to take out a bad credit loan? If you need a bad credit loan and don’t have a bank account, can you still get much-needed cash?

Why is it hard to get a loan with no bank account?

Simply put: it’s hard to get any kind of loan with no bank account because lenders get worried that you won’t pay them back. Okay, let’s rephrase that. When you don’t have a bank account, lenders get more worried that you won’t pay them back. Lenders, you see, are always worried about paying them back. They’re lenders. It’s what they do.

You might think that a bad credit lender would be less worried about this, but that isn’t so. Even though most bad credit lenders don’t check your credit score before issuing a loan (which is why their products are often referred to as “no credit check loans”) they still want some kind of assurance that they’ll get paid back.

(With some loans, especially short-term payday loans, the lender might not care so much about you paying your loan back on time because they’ll make a lot more money from having you rollover or reborrow your loan.