Financing a Car Loan Without a Bank Account
Financing a Car Loan Without a Bank Account
Posted on May 18, 2023
We tend to assume that everyone has a bank account, but that’s not strictly true. There are thousands of Canadians without one for a multitude of reasons. But does not having a bank account prevent you from getting a car loan?
Our car loan team explains your options.
Car Loans Without a Bank Account
You can certainly get a car loan without a bank account. You may have difficulty finding a lender with an acceptable payment method and will pay higher interest but you should still be able to get a loan.
The main challenge you’ll have is making payments and receiving the money.
Traditionally, both of these will be done using a bank account. You’ll use an automatic payment from your account to repay the loan and receive the funds into your bank unless you’re working with a dealership.
If you don’t have a bank account, your options are limited.
Some lenders will load the loan onto a prepaid debit card which you can use to buy the car. Others offer Bitcoin loans, cash or will pay the dealership directly.
You’ll also need to work out a payment method. That may be paying into a lender’s branch or paying the lender’s bank using cash each month.
Different lenders have different options so you should explore them once you know you could qualify for the loan.
Of more importance is proving you can afford the loan.
Bank Accounts & Affordability Checks
Most lenders will ask for bank statements to prove income and savings. As most employers will pay through the bank, statements are also useful for proving income, salary and outgoings all at once.
Without a bank statement, you’re going to need to prove those things another way.
It is entirely possible but it makes life a little more challenging.
You can use payslips, paper income statements from other income, an employment contract, and any formal paperwork to support your income claim.
If you don’t have a bank account, you’re unlikely to have traditional savings either. If you saved for a down payment, you may have to bring in the cash to prove it.
Of equal consideration is proving you’re not a financial risk.
While there’s no rule to say you have to have a bank account, it forms part of the popular picture of life here in Canada. If you don’t conform to that picture, you will have to work harder to prove you’re not a risk and that your finances are in good health.
That means having to provide a lot more paperwork to support your application, including the paperwork we mentioned earlier.
Anything you can provide to a lender to demonstrate you’re good with money, have sufficient income, can afford the loan, have a down payment saved and are otherwise a low risk borrower will help.
Not having a bank account does not prevent you from accessing car loans. It does make life more challenging and will require more effort on your part to qualify for the loan.
Fortunately, those are two things our team can help you with!
When you’re ready for a car lease or loan, get in touch with the Hagersville auto loan experts at Northway Ford for great deals on auto finance.
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