How to get a loan on a prepaid debit card?

Having access to a loan is essential in many life scenarios. In some cases, it serves to pay off immediate bills or cover some needs. Most people use credit cards to meet some payments or apply to the bank for credit to finance quick projects. However, not all people have the requirements to apply for a credit card or request financing from a bank.

Debit cards are also necessary tools to apply for small loans. These operate in the form of a “loan” and are used as a resource that can have high -interest rates. There are hundreds of providers and lenders interested in fulfilling these processes with whom you can consult.

Can you borrow with a debit card?

Yes, you can borrow with a prepaid debit card. This type of financing is called “payday loans.” The process works as follows: the applicant borrows, and the money drops directly into your bank account associated with the debit card. When the money is on the card, you can use it as you wish; there is no need to wait for the amount to be reflected in the bank account; you have immediate access to your card.

The quick loan industry has evolved rapidly within the United States because it adapts to everyone’s needs. It is very easy to apply because, unlike conventional credit, you do not need to have a high credit score. Lenders make the process effective even for those with negative credit histories, those without credit points, or those without a bank savings or checking account.

What do I need to apply for a payday loan?

Payday loans that accept prepaid accounts are very easy to apply for. They do not require a level of points, and you can have a bad credit history. This is a functional alternative for those who want to get quick cash without so many complications.

Requirements

Each lender has its requirements for issuing a day loan; however, most of them handle the same requirements standards. The general requirements to apply for the loan are as follows:

1. Be a U.S. citizen
2. Be over 18 years of age
3. Have a stable employment
4. Be able to demonstrate a monthly source of income such as pay stubs or receipts.

Documentation

The documents requested by lenders are as follows:

1. Date of birth
2. Social Security Number
3. Official government -issued photo ID
4. Details about your current employment and bills that prove your monthly income.

How to apply for a loan with a debit card?

If you meet these requirements and the necessary documentation, the steps to apply for the day loan are:

1. Compare offers from different lenders 
2. Choose the one that fits your needs
3. Send the application online, by mail, by phone, or by the means established by the lender
4. Receive a response of approval or rejection
5. If approved, the lender will transfer the funds to your bank account. If you do not have a bank account, it will send the money to an eligible bank account and deliver the prepaid debit card in person or mail it to you
6. If the card is not yours, you must register it in your name, and you can start using it

Most debit cards are Visa and MasterCard, and you can use them at any store for purchases. You can also use it at ATMs to withdraw cash.

Advantages and disadvantages of applying for this type of loan

These are some of the pros and cons of accessing these benefits.

Advantages

• Easy: The requirements are minimal, and almost anyone can access these funds. When you receive the money, you can pay in stores and withdraw cash at the ATM
• Other functions: The card is available for different functions such as receiving other deposits and accessing government benefits.
• Rewards: If you choose a good card, you can earn cash rewards for your spending
• Choose multiple lenders: In states where the process is legal, you can choose from a large number of lenders

Disadvantages

• High fees: This type of loan includes higher costs than other forms of financing. If you are unsure, don’t apply because you may be stuck with a large number of debts
• Short repayment terms: As the name states, you must repay the loan on your “next payday.” We recommend checking that your budget won’t be affected when you receive your monthly payment
• Scam lenders: Some people take advantage of the applicant’s financial vulnerability. We recommend that you verify that your lender is licensed and working legally before signing any contract

Frequently Asked Questions about Payday Loans

After knowing how this type of process works, we will clear up some frequently asked questions in the following lines:

After finishing with the loan, is it possible to borrow another loan with a debit card?

Yes, you do not have to apply for a new card to apply for another loan. Depending on the lender and their conditions, you will have to pay a fee to do this process. The card is not limited to loans; you can also use it to receive refunds, transfers, government social benefits, and more.

How much money can I get on these loans?

The amount of money for this type of loan is not large. It will also depend on the conditions set forth by the lender, but the standard is between $100 and $1,000.

What are the reasons for turning down this type of financing?

Reasons a lender would not approve credit would be: 

• You live in a state that is not eligible for the loan

These are the states where this procedure is legal:

1. Oregon
2. Idaho
3. Wyoming
4. North Dakota
5. South Dakota
6. Nevada
7. Utah
8. Alaska
9. Michigan
10. Missouri
11. Tennessee 
12. Alabama
13. South Carolina
14. Florida
15. Delaware
16. Rhode Island

These are the states where such transactions are prohibited:

1. Arizona
2. New Mexico
3. New York
4. Vermont
5. West Virginia
6. Maryland
7. New Jersey
8. Pennsylvania
9. Connecticut
10. Massachusetts

All states not on these lists have regulations that condition this type of transaction. If you live in one of them, check the rules they establish to apply for this type of loan. You do not generate the monthly amount of money necessary to access it.