Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Dec 5, 2011

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While every lender is different, the vast majority of payday lenders will not issue a payday loan to those without a checking account.


The reasoning is because checking accounts allow for direct deposit, and lenders feel more secure if their borrowers have direct deposit established. That way, in the event a borrower does not live up to his or her end of the bargain, the payday lender can withdraw the amount owed from the borrower’s account. Without this safety net the lender is issuing payday loans of sometimes several hundreds of dollars to a complete stranger based solely on that stranger’s word.


Another important reason for checking accounts is that online payday loans do not issue physical cash. Rather, for borrowers’ convenience, money is deposited directly into applicants’ checking accounts. This type of service wouldn’t be possible without checking accounts, and instead would leave borrowers to the mercy of a single local payday loan store’s rates. An online payday loan allows borrowers to find the best rates, and allows them to sit back while lenders fight for their business—not the other way around.


If you do not currently have a checking account but would like a payday loan, consider visiting a local bank and creating a quick, free account. Most banks offer their most basic account with no down payment, no fees, and little paperwork.


In the event you’ve been blacklisted from establishing a bank account, ask the bank what has caused you to be on that blacklist. More often than not it’s because you have a history of bad check writing, and have been flagged by a company called ChexSystems. This company stores information for up to five years on those who have a history of check mishandling. If you’re on ChexSystems’ list, you should contact them and ask how long you have left on their list and what company reported you to them. Sometimes, you can call the company who reported an offence against you and have them manually remove you from ChexSystem’s database—but they’ll only do this if you corrected the offence you were reported for.