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If you don’t have a bank account, you will likely run into a few obstacles when trying to get any type of loan, including a personal loan. While it’s not impossible to get a loan if you don’t have a bank account, it can be difficult to get approved, will likely cost more in interest and fees, and may require collateral to guarantee the loan.

However, if you need money fast, there are options available. Here’s a look at how to get loans without a bank account.

Is It Hard To Get a Loan With No Bank Account?

Yes, not having a bank account — in particular, a checking account — can make it difficult to qualify for a loan.

When you apply for a personal loan (or any other type of loan) the lender will typically ask for your bank account information and the last one to three month’s worth of bank statements. This helps them verify your income and gives them an idea of whether you have the cash to keep up with your loan payments.

However, if a financial emergency arises and you need money quickly, there may be loan options available that do not require a bank account. The hitch is that these loan products typically come with high interest rates, multiple fees, and short repayment terms.

Why Is Getting a Loan With No Bank Account Hard?

When a lender reviews an applicant to assess their loan requirements, they consider how risky the loan might be to their own business. In other words, they want to predict how likely it is that the borrower will be able to pay the loan back. When a loan applicant doesn’t have a bank account, the lender has more difficulty assessing that person’s income or cash flow.

There is also a logistical issue: Where should the lender send the loan proceeds? Typically, the money is sent to the borrower’s bank account. But if the borrower doesn’t have a bank account, there may be some question of where the money will be deposited and how it will be accessed, as well as how loan payments will be made.

Can You Get a Loan With Bad Credit and No Bank Account?

It’s possible but it might not be a good idea to get a loan without a bank account or good credit, since your options will be limited and expensive.

To assess your risk as a borrower, lenders will not only look at your banking history but also your credit history and scores. Your credit reports contain a record of how you’ve handled credit accounts in the past, including whether you pay your bills on time, what types of credit you use, how much debt you carry, and any delinquencies and collections you’ve experienced. This information is used to calculate your credit scores. Borrowers with excellent credit are not only more likely to qualify for a loan, but also get the best rates and terms.

If you have poor credit and no bank account, you will likely be seen as high risk to lenders. If you’re applying for an unsecured loan (meaning no collateral is required), you may not be approved.

You might, however, be eligible for a secured loan that’s backed by collateral, such as a car or other asset of value that you own. If you are unable to repay the loan as promised, the lender has the right to take that collateral as payment on the loan.

Pros and Cons of Loans With No Bank Account

If you’re looking for a loan with no bank account, you’ll want to carefully consider the pros and cons.

Pros of No Bank Account Loans

•  Fast access to cash No bank account loans, such as payday and title loans, typically provide a lump sum of cash right away.

•  No credit check Some no bank account loans won’t take your credit history or score into account, allowing borrowers with bad credit or who haven’t yet established any credit to access funds.

Cons of No Bank Account Loans

•  High costs Lenders who consider applicants with no bank account generally make up for risk by charging extremely high interest rates and fees.

•  Short repayment terms Unlike other types of personal loans, which usually give you years for repayment, no bank account loans (such as title loans and payday loans) often need to be paid in 30 days or less.

•  Can lead to vicious debt cycle Due to the short repayment terms for no bank accounts loans, borrowers often need to roll the loan over into a new short-term loan, leading to a cycle of debt.

5 No Bank Account Loan Options

Even if you don’t have a bank account, you may be able to access a loan. Here’s a look at some potential options.

1. Borrowing Money From Loved Ones

If you’re having a hard time financially, your loved ones may be able to step in. Whether you ask for money from friends or family members, it’s a good idea to have clear, written loan terms, and maybe even have the loan agreement notarized so there’s no confusion. Make sure expectations are clear for each party.

•   Does the loan have interest attached?

•   Are you expected to pay back the loan or is it a gift?

•   Are there in-kind options for paying back the loan, such as babysitting or tutoring hours?

•   What would happen if you were not able to pay back the loan?

Answering these questions can help create clear expectations and lessen the chance of a misunderstanding that could strain your relationship.

2. Payday Loan

A payday loan is usually for a small amount (often $500 or less) for a short period of time, typically until the borrower’s next paycheck. While it can be a source of quick cash, payday loans are problematic, given their high annual percentage rates (APRs).

Some states may cap the maximum allowable APR, but many payday loans charge fees of $10 to $30 for every $100 borrowed. A fee of $15 per $100 equates to an APR of almost 400%, which is significantly higher than the APR of a typical personal loan. If you can’t pay back your payday loan quickly, the fees can add up fast and make your existing financial problems snowball.

Risks of Payday Loans

The drawbacks of a payday loan may outweigh the benefits, and include:

•  High fees Lenders charge exorbitant fees and APRs for payday loans just in case the loan can’t be paid off.

•  Debt spiral If you can’t repay your payday loan on time, you’ll have to roll it over into a new loan and end up with even more fees and interest charges. This makes the loan even harder to pay back and can lead to a dangerous debt spiral.

•  Small loan amounts If you need a large sum of cash, a payday loan likely won’t offer enough, since they are usually $500 or less.

3. Title Loans

If you own your vehicle, you may be eligible for a title loan. Also called an auto title loan or vehicle title loan, this type of loan uses your vehicle as collateral. The lender holds your vehicle title in exchange for the loan. You then may be able to borrow a portion (often 25% to 50%) of the vehicle’s current value. As with payday loans, interest can be exceptionally high — as much as 300% — and there may be additional fees. If you are unable to pay back the loan, the lender has the right to take ownership of your vehicle. This can be a high-stakes situation for borrowers who depend on their car to go to work and school.

4. Pawn Shop Loan

If you have a valuable piece of jewelry, an antique, or other collectible to use as collateral, you might be able to get a pawn shop loan. The pawnbroker will assess the value of the item and provide a loan based on a certain percentage of its value. The loan terms will include interest. If the loan isn’t paid back according to the terms, the pawnshop then owns your item and can sell it.

5. Cash Advance

A cash advance is a short-term loan typically offered by your credit card issuer. A credit card cash advance allows you to borrow a certain amount of money against your card’s line of credit. You can usually get the cash at an ATM or through a bank teller.

A cash advance is a way to access quick cash but the interest rate will likely be higher than your card’s standard purchase APR, and higher than interest rates on personal loans. In addition, you typically need to pay a hefty cash advance fee.

Loan Options With a Bank Account

Before looking into loan options with no bank account, you may want to consider opening a checking account. If you’ve had past checking account errors or misuse, look into a second chance checking account. These accounts are designed to help people who have negative banking history get back in the door.

Borrowers with bank accounts generally have more — and better — loan options available to them. If you are able to open a checking account, here are types of loans you may be able to access.

Personal Loans

A personal loan is a lump sum of money borrowed from a bank, credit union, or online lender that you pay back in regular installments over time. Loan amounts can be anywhere from $1,000 to $50,000 or $100,000, and repayment terms range from two to seven years. Personal loans usually have fixed interest rates, so the monthly payment is the same for the life of the loan.

Personal loans are typically unsecured, meaning they’re not backed by collateral. Instead, lenders look at factors like credit score, debt-to-income ratio, and cash flow when assessing a borrower’s application.

You can generally use a personal loan for almost any purpose, including debt consolidation, home improvement projects, medical bills, emergencies, and refinancing an existing loan.

Recommended: How to Apply for a Personal Loan

Auto Loan

An auto loan is a loan that is used specifically to purchase a vehicle. They are available through banks, credit unions, and online lenders. Typically, auto loans are secured loans, which means the vehicle to be used as collateral for the loan.

When you take out an auto loan, the proceeds go to the vehicle’s seller to cover the cost of the vehicle. You then make monthly payments to the lender for a set period of time, which might be anywhere from two to seven years. The lender owns the car and holds the title until you pay off the loan. If you fail to keep up with payments, the lender can repossess the vehicle.

Student Loans

A student (or education) loan is a sum of money borrowed to finance college expenses, including tuition, supplies, and living expenses. Payments are often deferred while students are in school and, depending on the lender, for an additional six-month period after earning a degree.

Student loans are available from the government as well as through private lenders. Federal loans may have lower interest rates, and some also offer subsidized interest (meaning the government pays the interest on the loan while a student is in college). Private student loans are generally available in higher amounts.

The Takeaway

Getting a personal loan with no bank account may be possible but can be both costly and risky. Before committing to a lender that charges high interest and fees or requires collateral, you may want to explore opening a bank account.

Once you have a checking account, you may be able to access traditional personal loans with more favorable rates and terms.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

Can you get a loan without a bank account?

It’s possible, but you will likely be limited to loans with sky-high rates and short repayment terms, such as payday loans, pawn shop loans, and title loans. The lender may also require collateral (an asset you own, such as a car) that they can seize if you don’t repay the loan.

Can you get a loan with your SSN?

Having a Social Security number (SSN) can make getting a loan easier, since a lender can use it to retrieve information they need to process the loan. In addition to an SSN card, you also typically need to provide an additional proof of identity (such as a birth certificate, driver’s license, passport, or certificate of citizenship); proof of income; an proof of address (such as a utility bill, rental agreement, bank/credit card statement).

Can you get a cash advance without a bank account?

It’s possible, but it may be hard to find a lender who is willing to work with you. Your best option might be a credit card cash advance, which involves withdrawing cash from an ATM or bank using your credit card account. Just keep in mind that credit card advances generally come with high interest rates and fees. Another option for fast cash might be a payday or title loan, though these can have extremely high interest rates and other disadvantages.

Photo credit: iStock/MicroStockHub

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOPL-Q325-042

You may have heard that you should spend three months’ salary on an engagement ring. But that rule of thumb is now considered pretty outdated.

Instead, it can be a good idea to consider your particular financial and personal situation when calculating how much to spend. As a point of comparison, the average cost of an engagement ring is currently $5,200, according to the wedding website The Knot.

What follows are some guidelines that can help you figure out how much you should spend on an engagement ring, along with options for covering the cost.

The Average Cost of an Engagement Ring

According to The Knot’s 2024 data, the average cost of an engagement ring is around $5,200.

While that number may represent the average, the amount couples actually spend on a ring varies widely. In The Knot’s study, roughly one-third of respondents spent less than $3,000.

Why do rings vary so much in price? The cost of an engagement ring depends on a number of factors, including the size and quality of the stone, where the gem was sourced, how the gem is set, and the type of metal chosen (such as yellow gold, white gold, or platinum). There may also be markups that come along with a luxury brand name.

Diamond engagement rings, sourced from a mine, tend to be the most expensive choice. But there are many other, less costly options, such as lab-grown diamonds, moissanite (a lab-grown gem that looks like a diamond), and semi-precious gemstones (such as tourmaline, morganite, and aquamarine).

Whether you’re in the market for a large, eye-catching dazzler or a more dainty design, the good news is that these days there are ways to accomplish almost any look for a range of price points.

Recommended: How to Plan a Wedding

How to Pay for an Engagement Ring

While paying in cash can be the simplest (and often the cheapest) option, it may not be feasible for all couples. Below are some other payment options that you may want to consider, along with their pros, cons, and potential costs.

Financing an Engagement Ring Through Your Jeweler

Many jewelers offer financing options, but just because you’re buying from a jeweler does not mean you have to use the financing they offer. It can be a good idea to take note of the following:

•   Promotional offers Some jewelers offer a 0% introductory interest rate during a set period of time. But after that period of time, interest rates may be very high.

•   Down payment requirements Some jewelers may require a certain percentage down payment prior to financing.

Financing through a jeweler directly may make sense if you’re confident you can pay back the loan prior to the end of the promotional period. As with any loan, it’s likely that there will be a credit check prior to being approved for financing.

Buying an Engagement Ring With a Credit Card

Putting a large purchase like an engagement ring on your credit card can be a simple solution at the moment, but it may become a financial headache in the future. Here are some things you may want to consider before getting out the plastic.

•   Interest rate If you put the engagement ring on a card with a relatively high interest rate and don’t pay it off right away, the ring will end up becoming significantly more expensive over time. Also, keep in mind that many credit cards have a variable interest rate, which means the interest rate at the time of purchase could go up.

•   Credit-utilization ratio A large purchase like an engagement ring can mean using a significant percentage of credit available on your card. Having a high credit-utilization ratio may negatively affect your credit score.

•   Rewards and protections Some buyers like putting large purchases on credit cards because of the consumer protections offered by the card. They also may want to take advantage of the rewards offered by the credit card company. Those rewards, however, may only be worth it if you can pay the amount back in full at the end of the billing cycle or during a 0% interest promo rate.

Using a Personal Loan to Finance an Engagement Ring

A personal loan is another avenue for engagement ring funding. A personal loan from a bank, credit union, or online lender may have a lower interest rate than a jeweler financing program. Personal loans also typically have significantly lower interest rates than credit cards.

A personal loan also works differently than jeweler financing and credit cards. With a personal loan, you’ll get the money in your bank account and can then pay the jeweler as though you were paying in cash. You then pay back the loan (plus interest) in monthly amounts set out in the loan agreement. One option to consider: You might fold the ring’s cost in other upcoming expenses as part of a wedding loan.

Here are some things you may want to consider before using a personal loan to pay for an engagement ring.

•   Interest rate In many cases, a personal loan interest rate is fixed, meaning it doesn’t change after the agreement has been signed. This means that you know exactly how much you will need to pay back for the length of the loan.

•   Loan terms You may have an option to pick the length of the loan. Shorter loans may mean you’re paying less interest over time but have larger monthly payments. Conversely, a longer term loan may lower your monthly payment but have you paying more interest over the life of the loan.

•   Loan costs There may be fees associated with the loan, including an origination fee when the loan begins and a prepayment penalty if you pay off the loan before the end of the agreed-upon term.

•   “What if” scenarios Some lenders provide temporary deferment for people facing financial hardship, such as a job loss.

Recommended: Typical Personal Loan Requirements

The Takeaway

Spending three months’ salary for an engagement ring is a long-standing tradition, but these days there is no one-size-fits-all formula. While couples currently spend an average of $5,200 for a ring, ultimately, the amount paid is a personal decision and will depend on your income, debt, expenses, savings, and preference.
If paying for an engagement ring upfront in cash isn’t feasible, you may want to look into different financing options such as financing by your jeweler or a personal loan.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

How much should you spend on an engagement ring?

There’s no rule about how much to spend on an engagement ring. The old “three months’ worth of salary” guideline is outdated. How much to spend is a personal decision, though it’s worth noting that the average amount is currently $5,200.

How much should I spend on an engagement ring if I earn $100,000?

If you follow the old rule of spending three months’ worth of income, that would mean a $25,000 budget for a ring. But this has largely fallen by the wayside, with couples deciding the amount that best serves their big-picture financial needs and their budget. Currently, the average paid for an engagement ring is $5,200.

Is $5,000 enough to spend on an engagement ring?

There’s really no specific amount that’s enough or not enough to spend on an engagement ring. While the average spent on a ring is currently $5,2000, one survey found that most respondents spent between $2,500 to $5,000. Some couples will spend still less, while others might decide to go much higher. Take time to figure out your budget.

Photo credit: iStock/ljubaphoto

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOPL0623007

Owing money to the IRS can be stressful, especially if you’re not prepared for a tax bill. Whether it’s due to under-withholding, freelance income, or capital gains from selling an asset, you might find yourself facing a tax bill you can’t afford to cover up front. If that happens, you may wonder: Can I get a loan to pay taxes?

The answer is, yes. Taking out a loan, such as a personal loan, to pay taxes is an option. However, it’s important to weigh the pros and cons carefully against other possibilities like payment plans offered by the IRS.

Below, we explore what tax loans are, the available options for paying taxes when you’re short on cash, and the potential advantages and disadvantages of using a loan to cover your tax obligations.

What Is a Tax Loan and How Does it Work?

A tax loan is any form of financing used to pay off a tax debt. This can come in many forms, including personal loans, home equity loans/credit lines, payday loans, or even credit cards. These loans and credit lines are not issued by the IRS, but rather by private lenders, banks, or online financial institutions.

A tax loan allows you to pay your tax bill in full. You then repay the loan over time according to the lender’s terms. This could include fixed monthly payments over many months or years, along with interest and possible fees. Essentially, you’re swapping your debt to the IRS for a different kind of debt, one with a financial institution.

In some cases, the cost of a loan may be lower than the combination of interest and penalties the IRS charges if you don’t pay your taxes on time. Normally, the late-payment penalty is 0.5% of the unpaid taxes for each month the tax remains unpaid (not to exceed 25% of your unpaid taxes). The IRS also charges interest on your unpaid tax bill. The rate can change each quarter but was set to 7% for the third quarter of 2025.

Options to Pay Taxes

Before turning to a loan, it’s a good idea to consider all your options. The best choice for you will depend on your credit profile, financial health, and how quickly you can repay any borrowed funds.

IRS Payment Plans

The IRS offers payment plans, which you can apply for online. These plans allow you to spread the amount you owe into smaller payments without involving a third-party lender. Interest and penalties on your unpaid tax bill continue to accrue while you’re on an IRS payment plan, but the late-payment penalty drops to 0.25% per month.

There is a short-term plan for those who owe less than $100,000 and can pay the balance within 180 days. There is also a long-term plan for those who owe less than $50,000 but need more than 180 days to pay their balance. It’s free to set-up the short-term plan but the long-term plan comes with a set-up fee ($22 if you enroll in direct debts or $69 if you don’t).

Credit Cards

If your tax debt is relatively small and you have room on your credit card, paying the IRS with plastic can be a quick fix. However, this option should be approached with caution.

While the IRS allows tax payments via credit card, it does so through third-party payment processors that charge a convenience fee of around 1.75%. And if you can’t pay the credit card balance off immediately, you’ll be stuck paying high interest rates that can add up quickly.

One exception: If you can qualify for a credit card that offers a 0% introductory rate, using a credit card could be an affordable way to pay your tax bill over time. The key is to pay off your balance before the promotional rate ends (often 15 to 21 months). Otherwise this could be a costly way to get a loan to pay your taxes.

Loved Ones

Borrowing from family or close friends might be a viable option if you’re short on cash and want to avoid high-interest loans. This type of informal loan can offer flexibility in repayment terms, and often, little or no interest. It also doesn’t require a credit check, which can make it an appealing choice for people who may have a limited or poor credit.

However, mixing money with personal relationships can be tricky. If you don’t make agreed-upon payments on time or run into trouble repaying the loan, it could strain or damage relationships.

If you do decide to go this route, it’s important to be clear about expectations from the beginning. You might even want to draw up a simple agreement to outline expectations.

Payday Loans

Payday loans are short-term, high-interest loans intended to cover urgent financial needs until your next paycheck. They are typically easy to get and require little credit history, making them seem attractive for those looking for fast cash who might not qualify for other borrowing options.

However, payday loans come at a steep cost. According to the Consumer Financial Protection Bureau, fees often run around $15 for every $100 borrowed, which equates to an annual percentage rate (APR) of nearly 400%. Repayment periods are also typically short, generally two to four weeks.

Many borrowers fall into a cycle of renewing loans or taking new ones to pay off the previous ones, leading to a dangerous spiral of debt. These should only be considered as an absolute last resort.

Home Equity Loan or Line of Credit

A home equity loan and a home equity line of credit (HELOC) are both ways to borrow money using the equity in your home as collateral. A home equity loan provides a lump sum of money with a fixed interest rate, while a HELOC functions like a credit card, allowing you to borrow, repay, and borrow again against a set credit limit, often with a variable interest rate.

Home equity financing typically comes with lower interest rates than unsecured loans. But if you default on your loan or line of credit, you could potentially lose your home. This type of funding can also take some time to get, as the underwriting process typically requires multiple steps (including a home appraisal).

Personal Loans

A personal loan can be a practical solution for paying off taxes. There are different types of personal loans but typically these loans are unsecured, meaning you don’t need to put up any type of collateral. You borrow a fixed amount and repay it in equal installments over a predetermined term, typically one to seven years.

Interest rates vary widely depending on your credit score, income, and the lender’s policies. For borrowers with excellent credit, rates can be relatively low. However, those with fair or poor credit may face higher rates and fewer options.

Recommended: Personal Loan Calculator

Pros and Cons of Using a Personal Loan to Pay Taxes

Taking out a personal loan to pay taxes can be a smart financial move in some cases, but it’s not for everyone. Here’s a breakdown of the advantages and drawbacks.

Pros

•   Fixed repayment terms: Personal loans come with fixed monthly payments, which can make budgeting easier and help you plan your finances. Term lengths also tend to be longer than what you could get with an IRS payment plan.

•   Lower interest rates (with good credit): For borrowers with strong credit, personal loans typically offer lower rates than credit cards.

•   Quick funding: Many lenders can approve and fund a personal loan within a week; some even faster. That can be helpful if your tax payment deadline is looming.

•   Avoid IRS Penalties: Using a loan to pay your taxes on time can help you avoid late payment penalties and compounding interest from the IRS.

•   Credit Building: Successfully managing and repaying a personal loan can have a positive impact on your credit profile.

Recommended: Paying Tax on Personal Loans

Cons

•   Interest costs: Depending on your credit, personal loans can carry high interest rates that add significantly to your overall repayment amount.

•   Fees: Some personal loans come with origination fees, prepayment penalties, or late fees, which can increase the total cost of borrowing.

•   Could negatively impact credit: Taking out the loan will trigger a hard credit inquiry which can cause a small, temporary drop in your credit scores. Any late or missed payments could have a more damaging effect on your credit profile.

•   Increases your DTI: Since a personal loan adds another monthly debt payment, it directly increases your debt-to-income ratio (DTI) (a metric that compares your monthly debt payments to your gross monthly income). This could make it harder to qualify for other types of financing, such as a mortgage or car loan, in the future.

•   Not a long-term fix: A personal loan is a temporary solution. If your tax issue stems from deeper financial problems, it’s important to address the root cause.

The Takeaway

If you can’t pay your full tax liability by the deadline, it may be possible to get a loan, such as a personal loan or home equity loan, to cover the shortfall. This can help you avoid owing penalties and interest to the IRS, but it’s important to keep in mind that loans generally come with their own costs.

Before you borrow, you’ll want to carefully evaluate your financial situation, shop around for the best loan terms, and compare the total cost of borrowing against using an IRS payment plan. Understanding your options and choosing wisely can help you stay out of trouble with the IRS and protect your long-term financial health.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

Can I get a loan to pay taxes?

Yes, you can potentially get a loan to pay your taxes. One option is to apply for a personal loan from a bank, credit union, or online lender, and use it to cover your tax debt. If you own a home and have sufficient equity, another option is to take out a home equity loan or line of credit and use the funds to pay your taxes. A 401(k) loan or a credit card (ideally with a low a 0% promotional rate) are other potential options.

Before you borrow money to pay your taxes, however, it’s a good idea to explore an IRS payment plan. While the agency continues to charge interest and penalties on your unpaid balance, the cost could be lower than some borrowing options.

What is a tax loan?

A tax loan is any form of financing used to pay off a tax debt. For example, you can use a personal loan as a tax loan. This type of financing offers a lump sum you can use to pay the IRS or your local tax authority immediately. This helps avoid penalties, interest charges, or tax liens. However, tax loans also come with costs, so it’s important to weigh your options carefully.

How does a tax loan work?

A tax loan often works like a standard personal loan. You apply through a lender (such as a bank, credit union, or online lender) and if approved, you receive a lump sum, which you use to pay your tax bill. You then repay the loan in fixed monthly installments over a set period with interest.

A tax loan can be helpful if you don’t have enough cash to cover your tax bill, but it’s important to consider their potential costs and risks to determine if it’s the best approach for your situation.

Is using a personal loan for taxes better than using a credit card?

Using a personal loan for taxes can be better than using a credit card, depending on the terms. Personal loans often have lower interest rates than credit cards, especially for borrowers with good credit. They also offer fixed repayment terms, which can make budgeting easier. However, if you can qualify for a credit card with a 0% introductory rate and can pay off the balance before the rate goes up, that option might be more cost-effective.

What credit score do you need for a tax loan?

If you’re thinking of getting a personal loan to pay your tax bill, lenders generally prefer borrowers with good or excellent credit scores (mid 600s and above), though requirements vary. Borrowers with higher scores are more likely to qualify for better interest rates and loan terms. If your credit score is lower, you may still qualify through subprime lenders, but you’ll likely face higher rates. Many lenders also consider other factors — such as income, employment history, and debt-to-income ratio — when evaluating your application, not just your credit score.

Can I use a personal loan to pay property taxes?

Yes, you can use a personal loan to pay property taxes. This option can be useful if you’re facing a large, unexpected bill or trying to avoid late fees or a tax lien. A personal loan provides quick funding and fixed monthly payments, allowing you to spread the cost over time. Before going this route, however, it’s a good idea to compare interest rates and loan terms to other options, such as payment plans from your local tax authority.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOPL-Q325-012

Medical bills can represent a major financial challenge for many households, and sometimes they can contain errors. These mistakes can mean you’re overcharged and make unnecessary payments.

By learning how to scan your medical bills for errors, you can potentially save money and avoid stress.

How Common Are Medical Billing Errors?

Some studies have found that up to 80% of medical bills have errors. Such factors as frequently updated billing codes can wind up triggering erroneous charges.

With medical bills so complicated and medical errors so prevalent, it’s no wonder that the amount of medical debt in the U.S. is so high. One recent study found that Americans owe $220 billion in medical debt, and 14% of U.S. adults owe more than $1,000 in medical debt. What’s more, about 3 million citizens have medical debt that’s over $10,000.

One other statistic: Nearly 40% of adults with medical debt say they cut back on the needs of life (food, utilities, and rent, for instance), and 41% dipped into savings to pay off what they owe for healthcare services.

What Are Some Common Medical Billing Errors?

When medical billing inaccuracies emerge, they can either be purposeful or genuinely accidental. Either way, there are some frequent errors you may want to keep an eye out for.

Was the Bill Sent to Your Insurance Company?

If you have insurance, making sure your provider submitted a timely claim to the insurance company can be a good first step to take. Occasionally, providers may neglect to send the bill to your insurance company at all and charge you for the entire amount.

Your claim could also be denied if the provider didn’t have the right insurance information for you — even if the ID is off by just one digit. You’re already paying an insurance premium, so paying for the entire procedure out-of-pocket could boost your overall medical costs.

Were You Charged for Services You Didn’t Receive?

You may have to ask for an itemized list of all the charges in your bill, but verifying that you are only being billed for services or treatments that you actually received may be wise.

You may also want to confirm that the quantities are also correct — so you’re not being billed for two MRI scans when you only got one. The itemized bill should include prices, so checking that no extra zeros were added by mistake may be a good step in this process.

Was the Wrong Billing Code Used?

If your insurer denies coverage for a procedure or medication, you may be able to identify the correct billing code and request that the provider refile the claim. If you have questions about the codes used, checking with the medical provider and insurer may save you some research time.

One type of billing code error is known as upcoding. This is when the provider bills for a longer session than was provided (for example, being billed for a 60-minute session when you were only seen for 15 minutes). Another common error is known as unbundling, which refers to using codes for each component part of a procedure rather than a single code that covers them all.

Appealing an Insurance Denial

If you find an error during your hospital bill review, you may be able to file an appeal with your insurer if the charge was denied and you were billed for it. Appeal instructions can usually be found on the explanation of benefits received from your insurance company. Documentation to back up your appeal, such as medical records, can often help strengthen your case. The Patient Advocate Foundation offers a detailed guide to the insurance appeal process, including a sample letter.

There is usually a time limit to submit an appeal to the company providing your health insurance, which is typically 180 days, depending on the insurer. Insurers may provide a decision within 60 days. If you disagree with the decision, you can ask for an independent review — your insurer should provide you with information on how to do this.

If your appeals aren’t successful, you may wish to turn to one of several advocacy groups. For example, the Patient Advocate Foundation offers one-on-one assistance at no charge, and its website also lists organizations that provide help for people with specific conditions. People with Medicare can access free counseling through the State Health Insurance Assistance Program.

If you’re still stuck, hiring a medical billing advocate to represent you may be helpful. These professionals typically charge an hourly rate or take a percentage of the money they save you.


Recommended: How to Apply for a Personal Loan

What Are Some Options for Paying Off Medical Bills?

Even if you find errors in your medical bills and are able to resolve them, chances are this won’t eliminate what you owe entirely. Here are some ways you can approach paying off medical debt:

Negotiating a Reduced Bill or Payment Plan

Even if your bills don’t include any mistakes, they aren’t necessarily set in stone. If you’re having trouble making a payment, calling your provider’s billing department and explaining your situation may be the best first step to take.

Some may be willing to negotiate your medical bills, possibly lowering your fees if you make the payment in cash or in a lump sum.

You may be able to gain additional leverage by asserting, politely and accurately, that the provider charged an unfair rate, bolstered by research on average prices in your area and what Medicare allows for the service.

Even if you can’t get your payment reduced, you may be able to extend the due date. Many providers and hospitals will work with you to set up an affordable payment plan, sometimes without charging interest.

Budgeting for the Unexpected

Medical bills can pack an unexpected punch to an already tight budget. If you’ve already used some of the strategies listed above to reduce what you owe, it might be necessary to reduce expenses or increase income while you pay medical bills.

Taking a look at current spending is a good place to start. Determine whether there is nonessential spending that could be put toward what is owed.

If there is absolutely no wiggle room at all, you might consider increasing your income by taking on a side hustle or asking for a raise.

Once you find a way to include medical payments into your budget, using a spending tracker could be a helpful way to make sure you have the funds available each month.

Using a Credit Card

Paying medical bills with a credit card is certainly an option. It might be a quick and initially easy option, but it might not be the best. Credit cards typically charge high interest rates, which could make your medical debt larger over time. One solution might be to look for a no-interest credit card.

You’ll also want to create a debt reduction plan so that you can pay the balance in full before the promotional period ends.

Taking Out a Personal Loan

A personal loan can be a smart way to pay off medical debt. This type of loan is typically unsecured, meaning you are not putting your home or any other asset on the line.

A personal loan can be used for many purposes, including paying off medical bills, but typically comes with much lower interest rates than credit cards or payday loans.

Note that you can use a personal loan calculator to see how much interest you could save by using a loan to pay off a credit card.

Recommended: A Guide to Unsecured Personal Loans

The Takeaway

Taking time to review medical bills and making sure there are no errors can save time and money in the long run. Understanding medical bills and the insurance appeals process — if that’s a step you have to take — can be confusing, so getting assistance is sometimes helpful.

Keep in mind that even if you’re able to resolve the medical billing error, you may still owe money. There are different strategies for paying off medical debt. You may decide to try negotiating a reduced bill or setting up a payment plan with your provider. You could try removing nonessential items from your budget so you can pay off your bills. A credit card is another option, as is taking out a personal loan.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

How to check for medical billing errors?

It can be hard to understand medical bills and identify billing errors. One tactic to check for medical billing errors is to have your healthcare provider’s billing department walk you through exactly what you are being charged for and why.

Can I sue for incorrect medical billing?

It can be wise to first address discrepancies with the health care provider’s office. If you don’t reach an agreement about correcting an issue, know that the False Claims Act (FCA) can provide legal recourse to combat fraudulent medical billing.

What do I do if I think a medical bill is wrong?

You can address perceived errors on a medical bill with the provider and/or with your insurer. If the insurer doesn’t resolve the situation to your satisfaction, you might need to file an appeal or consult legal counsel.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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“No credit check” loans or quick loans for bad credit can look mighty attractive. However, products like payday loans and auto title loans can have major drawbacks, including short repayment periods and sky-high interest rates.

In fact, short-term loans can be so expensive that borrowers often end up paying exponentially more than they would if they’d financed the purchase some other way. And many loan holders end up re-borrowing, starting a vicious cycle that can quickly spin out of control.

What Are No Credit Check Loans?

No credit check loans, as their name implies, are loans that offer quick cash to borrowers without requiring a credit check. This means the lender doesn’t review your credit history or credit score when deciding whether to give you a loan. However, not requiring a credit check makes these loans risky for the lender, which is part of how they can justify high interest rates and fee schedules.

And when we say high, we mean high. It’s not hard to find payday loans with effective interest rates of about 400%, and sometimes they go much higher.

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No Credit Check Loans: Borrower Beware

Rather than a set interest rate, payday loans will often charge $10 to $30 for every $100 borrowed. If a payday lender charges $15 for a $100 two-week loan, that’s the equivalent of a 391% APR.

Here’s how those numbers can work out when it comes to real money. If a payday lender charges $10 for every $100 borrowed, you would owe $50 in interest for a $500 loan, and the $550 would be due on your next payday. If you are unable to repay the loan in full when it’s due, you will typically get hit with a fee, and then the cycle repeats itself. After a few months of rollovers, you can end up owing more in interest than the actual loan amount.

Another word to the wise: The fine print on short-term predatory loans can include a variety of fees, including change fees, mandatory subscription charges, and early repayment fees. These fees can quickly add up. On average, borrowers end up paying $520 in fees on a two-week payday loan for $375.

It’s clear to see how these loans, though small in size, can lead to big financial problems. Even under the best of circumstances, it can be difficult to get ahead of short repayment terms and steep interest rates and fees.

Recommended: What Is Consumer Debt?

Who Offers No Credit Check Loans?

Two of the most common types of these no-credit check loans are payday loans and auto title loans.

•   Payday loans As you might have guessed, payday loans are designed to be repaid on the borrower’s next payday — generally within two to four weeks. Because payday loans do so often carry predatory interest rates and terms, some states have limited the size and interest rate of payday loans, but even small loans with lower interest rates can lead to financial trouble.

•   Auto title loans Also referred to as “title loans,” these are another common type of short-term personal loan that doesn’t require a credit check. In the case of a title loan, the borrower gives the lender the title of their car as collateral for a cash loan of up to about 50% of the value of the car. The borrower is still allowed to drive the car, but the loan principal plus interest is generally due within 30 days — again at astronomical rates. If the borrower is unable to pay the loan, they risk having their car repossessed.

Other lenders offer similar types of short-term, high-interest rate personal loans, sometimes advertising online loans with “no credit check required” or “guaranteed loan approval.”

Even if they aren’t called payday loans or title loans, borrowers would be wise to pay attention to the loan’s terms and conditions, particularly interest rates, fees, and expected repayment schedules.

Generally speaking, too-good-to-be-true financial products are often just that. Staying informed about the full implication of the loan’s terms and doing the math to work out how much you will end up paying over time can help borrowers avoid a potentially disastrous financial situation.

Recommended: Can You Get a First-Time Personal Loan With No Credit History?

Alternatives to No Credit Check Loans

As financially harmful as no check credit loans can be, there still might be instances in which borrowers need quick access to money. Fortunately, there are some alternatives worth consideration.

•   For starters, borrowers might turn their attention to why they need the money in the first place. Short-term loans are often taken out to repay existing debt, an approach that might result in the borrower going even further into debt to try to scramble out of the hole.

   In this scenario, attempting to negotiate the existing debt with current lenders might be a better tactic. Sometimes, credit card issuers and other lenders might offer repayment options to ease the immediate financial burden. It’s a tactic that’s worth asking a creditor about.

•   Another option: borrowing from friends and family. While this can come with its own set of pitfalls, family loans are unlikely to create the same kind of debt spiral short-term cash loans might.

   In order to keep things friendly, you’ll want to set out a formalized loan agreement with interest rates and terms, similar to what you’d expect to sign for a traditional loan from a financial institution. This avoids any confusion and helps keep the transaction as objective as possible.

•   Credit unions are another source of small-dollar, payday loan alternatives — and importantly, credit unions are subject to a federal interest rate cap and other limits that keep these loans from becoming exorbitantly expensive.

•   Although they’re generally not an ideal solution, credit cards may carry lower interest rates than short-term cash loans. Some borrowers might also be able to utilize a promotional 0% interest rate period in order to aggressively pay off debt during the promotional period without paying interest.

•   Another alternative is a traditional personal loan from an online lender. While these loans usually do require a credit check and specific approval requirements, some online lenders will extend loans to applicants with imperfect credit histories. Rates are typically higher. However, they likely won’t be nearly as high as payday loans.

   You may be able to get a better rate by applying for a secured personal loan (which requires using an asset as collateral) or including a co-borrower on the loan agreement.

Recommended: How to Apply for a Personal Loan

The Takeaway

While no credit check loans can certainly be attractive, their high interest rates and associated fees can make them costly over time. Borrowers may not be able to repay the loans plus interest in the short repayment term required, which could lead to a debt treadmill scenario and, possibly, negative credit history consequences.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

Can I take out a loan without a credit check?

Some lenders will let you take out a loan without a credit check, but you will likely pay very high interest rates and fees, which could trap you in a cycle of debt.

What types of loans don’t require a credit check?

Typically, payday loans, auto title loans, and other peer-to-peer lending don’t require credit checks. However, make sure you understand the interest rate and terms to avoid your debt increasing.

What is the easiest type of loan to get quickly?

Typically, the easiest type of loan to get quickly is a payday loan or no credit check loan, but these tend to have extremely high interest rates and/or fees, so proceed with caution.

Photo credit: iStock/FG Trade

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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