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Is a Bank Account Needed to Get a Car Loan?

Is a Bank Account Needed to Get a Car Loan?

Paying full cost for a vehicle is difficult without significant money in your pocket. Instead, most people head to the bank to take out a car loan. Each bank and financial institution sets the requirements for loaning money to interested consumers. Whether or not you need a bank account depends on the bank you choose. There are financial institutions available that loan to consumers without bank accounts.

Scoring the Cash

Banks are mostly concerned with your ability to repay and your history of doing so. All financial institutions require you start the process by submitting an application. The application provides your personal information, including your name, address, employer and wage information. The application provides the bank with the authorization to pull your credit report. You need a stable wage history and a decent credit score. Without both, you are not likely to get an approval — even with a bank account.

Denied a Bank Account

Poor credit and a previous history of bad checks are the most common reasons for being denied a checking account. If that’s your situation, you may run into problems getting a car loan — not because of the lack of account but rather because car loans use similar criteria for bank accounts as loan applications.

Ditching the Bank

Banks are not the end-all for storing your hard earned-cash. With so many financial alternatives available, many people are opting out of the mainstream banking. According to Forbes, approximately 28 percent of Americans conducted financial transactions outside the banking system in 2012. Your alternatives include check-cashing services, prepaid debit cards, money orders and credit cards. If ditching the bank is a personal choice and not for poor payment history, you may have a chance to score the auto loan.


Without a bank account, you must find an alternate means of paying your bills each month. You’ll need to mail in payment using a money order or cashier’s check or use a online bill payment program. Using a prepaid debit card may allow you to pay online, but it depends on the specific bank you use. You may also notice more fees in your effort to ditch your bank. Prepaid debit cards, money orders and cashier’s checks come with fees. Your bank may also charge a convenience fee for using a debit or credit card. Many banks are more lenient with existing customers. Using a financial institution you already have a relationship with is more likely to result in an approval. You do not get this benefit without a bank account.


If you have sufficient income and credit history, it’s likely someone will loan you money for your auto loan. It’s a matter of finding the right lender. Check with your local credit unions and banks first. If you are still running into walls, consider adding a co-signer into the mix. A co-signer uses his income and credit history to secure the loan on your behalf, which also makes him responsible for payments if you default.

  • Cars: Car Loan: What You Need to Get One
  • Bankrate: 9 Steps to a Car Loan on Damaged Credit
  • Forbes: Who Needs Banks? Number of Americans Without Bank Accounts Rises
  • Northwestern Mutual. “Here’s the Difference Between Banks, Credit Unions and Brokerages.” Accessed .
  • Federal Deposit Insurance Corporation. “FDIC Community Banking Study,” Page 1. Accessed .
  • Federal Deposit Insurance Corporation. “Learning Bank – Checking & Savings Accounts.” Accessed .
  • Federal Deposit Insurance Corporation. “Five Things to Know About Safe Deposit Boxes, Home Safes and Your Valuables.” Accessed .
  • U.S. Bank. “U.S. Bank Mobile App.” Accessed .
  • Bank of America. “Bank Account Rates & Fees FAQs.” Accessed .

Leigh Thompson began writing in 2007 and specializes online installment loans New York in creating content for websites. She has been published online in various capacities. Thompson has an associate degree in information technology from the University of Kansas and is working on a bachelor’s degree in business and personal finance.

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