Can I Finance a Car Without a Bank Account?

Can I Finance a Car Without a Bank Account?

March 13, 2019    Bad Credit Loans

In short: yes, you can get a car loan if you don’t have a bank account. It certainly makes things more complicated, but being bank account-free shouldn’t stop you from shopping for a new vehicle.


Not everyone has a bank account

Most people manage their money through a bank, but there are many reasons why someone might not have a chequing or savings account.

Previous banking issues, moving to a new place and unemployment can all play a role in your ability to open an account. Luckily, it is possible to operate without a bank account in today’s society.


What’s required to get a car loan?

When you apply for a car loan the lender’s first priority is making sure you make enough money to pay back what you borrow. If your income is high enough to cover the monthly financing payments you have a pretty good chance of being approved for a loan — regardless of your banking or credit situation.


For example, these are the requirements for getting a car loan with Birchwood Credit Solutions:

1. A valid driver’s licence.
2. Canadian residency.
3. An income of at least $1,500 per month 

A recent paystub with your year-to-date earnings will usually suffice as proof of income.

A lender will ask for your banking info so they can transfer you the money once you’ve been approved for vehicle financing. Without a bank account, you’ll have to cash the cheque or move the money into a prepaid account.

Find out if you can pay the lender in cash when making monthly payments.


How does a bank account affect your credit score?

Day-to-day banking doesn’t actually play a role in your credit score. Credit reporting bureaus don’t track deposits or withdrawals, so not having a bank account doesn’t affect your credit standing.

The only time credit comes into play is when you’re trying to open a bank account.

A bank will usually do a soft inquiry on your credit report when you apply for an account. But in some cases they make a hard inquiry, which can lower your score by a few points.

This usually happens when you sign up for overdraft protection, which is essentially a line of credit for your chequing account.


What kind of borrowers don’t have a bank account?

Those without a bank account often have other financial issues and bad credit as a result. When applying for a car loan, bad credit means you’ll only be able to access subprime financing, which means paying higher interest rates than someone with great credit.

Subprime borrowers are also limited in where they can get approved for a car loan.

Banks often don’t lend to those with “riskier” credit histories, but in-house financing through a dealership usually offers more flexibility.


A bank account isn’t necessary for a car loan

Whether not having a bank account is a deliberate choice or the result of a situation outside of your control, it is possible to get a car loan without one. Income is the biggest factor in car loan approvals because the lender wants to know you can pay off the loan. Bring proof of income in when applying for a car loan and make a plan for managing the proceeds of the car loan if you get approved.



Birchwood Credit Solutions lends its own money through in-house financing and has car loan requirements that are more flexible than a bank. Fill out an online application today or give us a call to find out more about our bad credit car loans.

Rebecca Lake
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