Prepaid Cards

Complete Guide to Loans on Prepaid Debit Cards

What is a prepaid debit card loan, and should you get one?

Say you need a loan, but you don’t have a bank account and don’t want to get it in cash. Getting a loan on a prepaid debit card could be a good solution. But is it the right financial move for you?

Here’s what you need to know.

What is a loan with a prepaid debit card?

A prepaid debit card loan is a short-term loan that is issued to you on a prepaid debit card. Both payday loans and short-term installment loans offer them.

They can be helpful if you don’t have a bank account, because they allow you to have the convenience of a debit card without needing a checking account. Prepaid cards are typically Visa or Mastercard brands. As such, you can use them with a wide variety of merchants. You can use them to shop online, pay bills, or use them in regular stores.

How does a payday loan deposited on a prepaid debit card work?

You apply with a short-term loan lender who offers loans on prepaid debit cards. Once approved, the lender transfers the balance to the prepaid card. Once you receive your card, you can use it to make purchases or withdrawals from the ATM.

In some cases, you can receive multiple loans from more than one lender on a single card. In addition, your card can receive deposits from other parties, like employers, the government, or other lenders.

Who offers payday loans with debit cards?

The most common type of lender to offer loans loaded on prepaid cards are those that offer short-term loans, like Speedy Cash, Check Into Cash, or Check City.

Do you live in a state that allows payday loans with prepaid cards?

As most prepaid card lenders are either payday loans or short-term lenders, it makes sense to check whether you live in a state that allows them. The table below provides detailed information on payday regulations by state. If your state doesn’t allow payday loans you may still be able to get a short-term loan with a regular lender.

Can you qualify for a short-term loan on a prepaid debit card?

To qualify, you usually have to meet the following eligibility requirements:

  • Permanent resident or U.S. citizen.
  • At least 18 years of age.
  • Proof of income.
  • Social security number.
  • Valid government-issued ID.
  • Short term loans must be legal in your state.

Requirements and terms (such as legal status, loan amounts, loan terms, and finance charges) vary by state and lender.

What you should know before taking out a short-term loan

Before taking out a short-term loan, it’s important to understand what you’re getting into. Short-term loans are risky because they have high costs and short repayment terms. This combination makes it hard to repay them on time.

Consider that 80% of the borrowers who take out payday loans fail to pay them off on time, and are forced to roll them over for an additional term. The average payday loan borrower pays $520 in fees to borrow $375. Not exactly cost effective.

However, many people take out short term loans out of desperation. Say you’re in a tight corner, need money today, and are having trouble finding it. What are your other options?

Alternatives to prepaid debit card loans

Short-term loans aren’t your only option, even if you have bad credit or no bank account. Consider the following alternatives:

Side job

Another option is to pick up a side job to supplement your income. If you have a qualifying car and a good driving record, you could drive for a ride-sharing service like Lyft. You could also pick up assignments on a site like Instacart or Fiverr.

Compare side jobs here:

Government benefit plans

Most people who take out payday loans do so to pay for their regular recurring expenses. If you regularly struggle to pay for your bills, consider looking into government programs that can help. You may qualify for assistance with your rent, bills, food costs, and more.

Credit cards

If you qualify for a credit card, you will likely get a more competitive APR and more flexible repayment terms than you would with a short-term loan. Plus, if you make your minimum payments on time, a credit card can help you build your credit.

If you have bad or no credit, consider the Indigo Platinum Mastercard or the Milestone Gold Mastercard, which both cater to credit scores from 550 to 650.

Compare credit cards:

Loans from friends and family

Consider asking a friend or family member to loan you the money. They may be able to provide you with better terms and lower (or no) interest costs. However, be aware that your relationship will suffer if you fail to repay the loan.

Personal loans

With the advent of online lenders, personal loan offerings are more diverse than ever. Even if your credit isn’t great, you might qualify for a personal loan with better terms than a short-term loan. Pre-qualifying for a loan won’t hurt your credit, so there’s no harm in trying.

With SuperMoney’s personal loan engine, you can find out in minutes what you pre-qualify for. You may even be able to borrow a larger amount.

Find your best rate. 

Should you get a short-term loan on a prepaid debit card?

With all the options on the table, is a short-term loan on a prepaid card the best move for you?


Here is a list of the benefits and the drawbacks to consider.

  • Get approved with bad credit.
  • No bank account is okay.
  • Get access to cash fast.
  • Enjoy the convenience of a debit card.
  • Set up the debit card to receive other deposits.
  • Shop around with multiple lenders.
  • High annual percentage rates (APRs).
  • Short loan terms make it difficult to repay on time.
  • Many borrowers struggle to repay on time.
  • Some lenders aren’t trustworthy.
  • Not legal in all states.
  • Low loan amounts.

Are you going to get a short-term loan? First, research the laws pertaining to them in your state. Once you know what is allowed, compare offers from multiple lenders that offer debit card loans. Look for:

  • The lowest cost.
  • Longest loan term.
  • And other attractive benefits (like rewards or credit building programs).

Plus, be sure to look at the company’s reviews to find out what past customers have to say about their experience with the company.

Not sure where to start your research? Compare the following industry-leading short-term loan lenders.