Check cashing is a financial service that allows individuals to convert checks into cash without needing a bank account. This service is typically used by those who are unbanked or underbanked, meaning they either do not have a bank account or rely on alternative financial services despite having an account. To cash a check, a person visits a check cashing store, presents their check and a valid identification card, and receives cash immediately after paying a fee. This fee varies by provider and can range from a minimal amount to a percentage of the check’s value.

Check cashing services are offered at various locations, including dedicated check cashing stores, major retailers, and some grocery stores. These services are particularly useful for cashing payroll checks, tax refund checks, government checks, insurance settlement checks, and personal checks. Unlike banks, which may impose a waiting period before the funds from a check are accessible, check cashing services provide immediate access to cash.

Features

1. Wide Range of Check Types Accepted. Check cashing services accept various types of checks, including payroll checks, tax refund checks, government checks, insurance settlement checks, and personal checks. This flexibility makes it a versatile option for many individuals.

2. Convenient Locations. Check cashing services are widely available at dedicated stores, major retailers, and grocery stores. This widespread availability ensures that individuals can easily find a location to cash their checks, even in areas with limited banking options.

3. Extended Business Hours. Many check-cashing stores offer extended business hours, with some locations open 24/7. This provides greater convenience for individuals who need to cash checks outside of regular banking hours.

4. Fee Disclosure. Check cashing services are required to disclose their fees upfront. While the fees can vary widely, customers are informed about the cost before completing the transaction. This transparency helps individuals make informed decisions.

5. Additional Financial Services. Besides cashing checks, many check-cashing stores offer other financial services such as money orders, prepaid cards, bill payments, and payday loans. These additional services can be beneficial for individuals who need various financial transactions handled in one place.

Pros and Cons

How to Get Check Cashing Services

1. Find a Check Cashing Store or Retailer. Begin by locating a nearby check cashing store or retailer that offers check cashing services. These establishments can include dedicated check-cashing stores, major retailers, grocery stores, and convenience stores.

2. Gather Necessary Documents. Before heading to the check cashing location, ensure you have the required documents. Typically, you'll need a valid form of identification, such as a driver's license, state-issued ID card, or passport. Some places may also require additional identification or documentation, so it's best to call ahead or check their website for specific requirements.

3. Endorse the Check. Sign the back of the check in the designated area just before cashing it. This endorsement signifies that you are authorizing the check to be cashed or deposited.

4. Visit the Check Cashing Store. Bring your endorsed check and identification to the chosen check cashing location. Once there, you'll be assisted by a cashier or representative who will guide you through the process.

5. Pay the Required Fee. Check cashing services typically charge a fee for their convenience. The fee may be a flat rate or a percentage of the check amount. Be prepared to pay this fee at the time of cashing the check.

6. Receive Your Cash. Once your identity is verified, and the fee is paid, you will receive your cash immediately. Unlike traditional banks, which may impose a waiting period for funds to clear, check cashing services provide instant access to cash.

Best places to borrow a loan with bad credit

Upgrade

Upgrade is a prominent online lender that offers personal loans to borrowers with bad credit. They provide loan amounts ranging from $1,000 to $50,000, making them suitable for various financial needs. The minimum credit score required by Upgrade is relatively low, typically around 580. This makes it accessible to individuals with a less-than-stellar credit history. One notable advantage of Upgrade is its flexible repayment terms, which can extend up to five years. This longer repayment period allows borrowers to manage their monthly payments more effectively. However, it's worth noting that Upgrade charges origination fees ranging from 2.9% to 8%. Additionally, while they do not have any prepayment penalties, borrowers should be aware of the interest rates, which can be relatively high for individuals with bad credit.

Upstart

Upstart is another online lender that specializes in providing loans to borrowers with bad credit. Their loan amounts range from $1,000 to $50,000, allowing borrowers to access the funds they need for various purposes. Upstart utilizes a unique underwriting model that takes into account factors beyond just credit scores, making it more inclusive for individuals with limited credit history or low credit scores. The minimum credit score required by Upstart is typically around 580. One of the significant advantages of Upstart is its soft credit check, which means that applying for a loan does not negatively impact your credit score. Repayment terms offered by Upstart range from three to five years, providing borrowers with flexibility. While they do charge origination fees of up to 8%, it's important to note that they don't impose any prepayment penalties. However, borrowers with bad credit should expect higher interest rates.

LendingPoint

LendingPoint is a bad credit lender that offers personal loans ranging from $2,000 to $36,500. They consider borrowers with credit scores as low as 585, making them accessible to individuals with bad credit. LendingPoint prides itself on providing fast funding, often disbursing funds within one business day. Their repayment terms typically range from two to four years, allowing borrowers to tailor their loan duration according to their needs. It's important to note that LendingPoint does charge origination fees that can be up to 6%. They also have a slightly higher interest rate compared to traditional lenders, which is to be expected when borrowing with bad credit. However, they do not impose any prepayment penalties, enabling borrowers to pay off their loans early if they desire.

Universal Credit

Universal Credit is an online lender that specializes in bad credit loans, offering loan amounts ranging from $500 to $15,000. Their minimum credit score requirement is relatively low, typically around 550, making them accessible to borrowers with poor credit. Universal Credit offers repayment terms ranging from six months to five years, allowing borrowers to choose a duration that aligns with their financial situation. While they charge origination fees, the amount may vary based on the borrower's creditworthiness. One notable advantage of Universal Credit is its willingness to consider applicants who have previously filed for bankruptcy. However, borrowers should be aware that the interest rates associated with bad credit loans from Universal Credit may be higher compared to traditional lenders.

OneMain Financial

OneMain Financial is a well-established lender that specializes in bad credit loans. They offer loan amounts ranging from $1,500 to $20,000, making them suitable for various financial needs. OneMain Financial requires a minimum credit score of 600, slightly higher than some of the other lenders in this category. However, they have a reputation for considering other factors beyond credit scores when evaluating loan applications. OneMain Financial provides repayment terms that range from two to five years, allowing borrowers to select a term that fits their budget. It's important to note that OneMain Financial charges origination fees, which can vary depending on your residence state. While they do not disclose their interest rates upfront, borrowers with bad credit should expect higher rates.

Avant

Avant is an online lender that specializes in offering personal loans to individuals with bad credit. They provide loan amounts ranging from $2,000 to $35,000, catering to various financial needs. Avant has a minimum credit score requirement of 580, making them accessible to borrowers with less-than-ideal credit histories. Repayment terms offered by Avant typically range from two to five years, giving borrowers flexibility in managing their monthly payments. While Avant charges origination fees up to 4.75%, they do not impose any prepayment penalties. It's important to note that Avant's interest rates can be relatively high for borrowers with bad credit. However, they provide a transparent prequalification process that allows borrowers to check their potential loan offers without affecting their credit scores.

Requirements

1. Valid Identification. Borrowers must present a valid form of identification, such as a driver's license, state-issued ID card, or passport, to verify their identity.

2. Endorsed Check. The check must be properly endorsed by the borrower before it can be cashed. Endorsing the check involves signing the back in the designated area.

3. Verification of Identity. Check cashing services verify the borrower's identity using the presented identification documents to ensure they match the information on the check.

4. Fees and Costs. Always inquire about the fees for cashing your check. These fees can vary significantly depending on the type of check and the amount. For example, fees can range from a flat fee of $1 to a percentage of the check amount, such as 2%.

5. Compliance with Regulations. Borrowers must adhere to all applicable regulations and guidelines governing check cashing transactions, including providing accurate information and complying with anti-money laundering laws.

Conditions

1. Immediate Access to Cash. Check cashing services provide instant access to cash upon presenting a valid check and identification.

2. Flexible Hours. Many check-cashing stores offer extended business hours, with some locations open 24/7, providing convenience for customers with varying schedules.

3. Wide Range of Accepted Checks. Check cashing services accept various types of checks, including payroll checks, tax refund checks, government checks, insurance settlement checks, and personal checks.

4. Transparent Fee Structure. Check cashing services disclose their fees upfront, ensuring customers are aware of the cost before completing the transaction.

5. No Bank Account Required. Individuals can utilize check cashing services without having a bank account, making it accessible to those who cannot or choose not to maintain traditional banking relationships.

Ways to Get the Money

1. Cash Payment. The most common method of receiving funds from a check cashing service is in cash. Upon verification of identity and payment of applicable fees, customers are handed the cash equivalent of the check amount immediately.

2. Prepaid Debit Card. Some check cashing services offer the option to receive funds on a prepaid debit card. Customers can choose to load the funds onto a prepaid card provided by the service, which can then be used for purchases or ATM withdrawals.

3. Money Order. In certain cases, customers may opt to receive the funds in the form of a money order. This is particularly useful if the customer needs to send money through the mail or make a payment that requires a money order.

4. Cashier's Check. In situations where customers need a secure form of payment, such as for large purchases or to guarantee funds, they may request to receive a cashier's check from the check cashing service. This ensures that the funds are guaranteed by the issuing institution.

Things to Pay Attention To

1. Identification Requirements. Ensure you have a valid form of identification, such as a driver’s license, state-issued ID card, or passport. Some check cashing stores may require two forms of ID. Be prepared for the service to verify your identity thoroughly, which might include checking the details on the check against your ID.

2. Service Limitations. Verify which types of checks the service accepts. Some may not cash personal checks or may have different fees for different check types. Check for any limitations on the amount that can be cashed in a single transaction. Some stores may have a maximum limit, particularly for personal checks or two-party checks.

3. Additional Services. Consider if the store offers additional financial services that might be useful, such as prepaid debit cards or money orders. Some check-cashing stores also offer bill payment services, which can be convenient if you need to pay bills immediately after cashing your check.

4. Operating Hours. Check the store’s operating hours. Many check-cashing stores offer extended hours, including evenings and weekends, which can be convenient if you need to cash a check outside of regular banking hours.

5. Service Reputation. Look for reviews and ratings of the check cashing service to ensure they have a good reputation for customer service and fair practices. Ensure the service complies with local and federal regulations, providing a secure and legitimate transaction process.

How to Repay Check Cashing Services?

1. Understand Your Repayment Terms. Carefully read the terms and conditions of your loan agreement. Pay attention to the repayment schedule, interest rates, and any fees or penalties for late payments.

2. Know the Due Dates. Make a note of all due dates for your repayments. Ensure you have a clear understanding of when each payment is expected to avoid late fees.

3. Set Up Automatic Payments. If your check cashing service offers automatic payment options, consider enrolling. This can help ensure that payments are made on time, directly from your bank account. Some services may allow repayments to be made via a prepaid debit card, which can be set up for automatic deductions.

4. Make Manual Payments. You can repay the amount owed by visiting the check-cashing store in person. Bring the required amount in cash or use a debit card if the store accepts it. If the service offers an online portal, log in to your account to make a payment. This can be done via a bank transfer, debit card, or another approved method.

5. Pay by Phone. Some check cashing services allow you to make payments over the phone. Call the customer service number provided by the service and follow the instructions to make your payment.

6. Mail Payments. You can send a check or money order via mail to the address provided by the check cashing service. Make sure to include your account number and other required information to ensure your payment is correctly applied.

7. Mailing Time. Allow sufficient time for your payment to arrive before the due date to avoid late fees.

Reasons for Getting Rejected for Check Cashing Services

1. Insufficient Identification. Most check cashing services require valid identification to verify your identity. If you don't have a government-issued ID, such as a driver's license or passport, your check may be rejected. Even if you have an ID, it must be current. Expired identification is generally not accepted.

2. Unacceptable Check Types. Some check cashing services do not accept personal checks due to the higher risk of insufficient funds. Checks made out to two people or endorsed over to a third party may be rejected because they are considered higher risk.

3. Out-of-State Checks. Checks issued by banks from different states might be rejected due to the difficulty in verifying funds.

4. Check Issues. If the check has any visible alterations, such as changes to the amount or payee name, it may be rejected. Checks that are more than six months old (stale-dated) are often not accepted. Checks dated for a future date cannot be cashed until the date on the check.

5. Insufficient Funds. If the check issuer’s account does not have enough funds to cover the check amount, the check cashing service will reject it. Checks from accounts with a history of bounced checks may be flagged and rejected.

Alternatives

1. Bank or Credit Union Accounts. Depositing your checks directly into a bank or credit union account is often free and provides access to additional services like online banking and debit cards. Many employers offer direct deposit, which automatically deposits your paycheck into your bank account, eliminating the need for check cashing. Banks and credit unions often offer mobile apps that allow you to deposit checks using your smartphone by taking a picture of the check.

2. Retailers and Grocery Stores. Walmart offers check cashing services for a low fee. They charge $4 for checks up to $1,000 and $8 for checks over $1,000, with a maximum of $5,000 (or $7,500 during tax season). Kroger stores and their affiliates also cash checks for a small fee, usually less than $5 per check.

3. Prepaid Debit Cards. Load your check onto a prepaid debit card at participating retailers or through mobile apps. These cards can be used like regular debit cards for purchases and ATM withdrawals. Some prepaid cards allow you to reload funds through direct deposit, making it a useful option for regular income streams like paychecks.

4. PayPal and Other Digital Wallets. Deposit checks via PayPal’s mobile app by taking a photo of the check. Funds can be used for online purchases, transferred to your bank account, or withdrawn at ATMs with a PayPal debit card. Services like Venmo or Square Cash also allow mobile check deposits, providing quick access to funds.

Editorial Opinion

Important

How to Choose a Lender

1. Make sure to confirm whether the lender is licensed to operate in your state. You can verify this information with your state regulator or attorney general.

2. Check if the lender is a member of a reputable association, such as the Community Financial Services Association of America. Membership in such organizations may provide an extra level of reliability.

3. Carefully review all the terms and conditions of your payday loan contract.

4. Thoroughly examine the interest rates on payday loans and ensure that your contract includes a detailed breakdown of the total cost of the loan.

5. Take advantage of your right of rescission. Usually, you can rescind the loan within three days after signing the agreement. Alternatively, there is typically a "cooling-off" period, which allows you several days to thoroughly review the contract before making an informed decision to enter into a consumer loan agreement based on the terms specified by the lender.

6. Choosing a payday lender is a significant decision that demands careful consideration and a good understanding of how such organizations operate.

Additional Resources

• What Credit Score Do You Need for a Personal Loan?
• How to Get a Personal Loan in 7 Steps
• Personal Loan Pre-Approval
• How to Apply for a Personal Loan
• Personal Loan vs Personal Line of Credit