Can you get a loan with a debit card?
In general terms, yes it is much easier to get a loan when you have a UK bank account with a debit card than when you don’t. This is because a debit card confirms that you have a bank account, which is one of the main requirements of UK direct lenders for offering you a loan. In addition, it simplifies the process of checking your eligibility from the lender’s side and reduces admin around setting up repayment plans.
In many ways, debit card loans act as an alternative to payday loans. It is not necessarily true that with payday loans no debit card is required, but some lenders might consider your application if you have a bank account with no debit card. Having one can make it easier for you to be accepted for a short term loan. For those seeking payday loans with no debit card direct lenders are sometimes less inclined to offer funds as a card can indicate financial reliability.
What are prepaid debit card loans?
In a situation where you require payday loans with no debit card, prepaid debit card loans may be an option. A short-term or payday loan will be added to an existing prepaid card you have with your bank or another financial business. Before taking out a loan in this way, you need to be absolutely sure that you are in a position to pay back the money you borrow. No debit card loans are ever free, therefore understanding the cost and repayment amounts is key before completing a loan application.
If you use a prepaid card to budget your finances, moving a loan to your card will temporarily increase the amount of money available to you. This money will need to be repaid, so paying close attention to your spending habits is essential to avoid getting into financial difficulties. Choose Wisely can help you at every stage of your application to make sure it’s the right solution for you.
Prepaid debit card loans require applicants to have an active prepaid debit card to both receive funds and make repayments. Prepaid debit card loans are often seen as preferable to cash loans because it's easier to keep track of card transactions via bank statements and banking apps than payments made with cash.
Can I get a loan without a debit card?
Although many lenders require applicants to have a UK bank account, there are alternatives to debit card loans. Some lenders offering payday loans will offer loans without debit cards, even direct lenders. Some doorstep lenders or pawnbrokers, for example, may provide cash-in-hand loans, but it is important to carefully consider the financial implications of using cash loans before exploring this option.
These forms of cash loans almost always come with extremely high interest rates and many of them are from unregulated lenders who will employ aggressive and illegal collection tactics.
It may be better to speak with your bank to see what you can do to improve your credit rating so that you can get a debit card. The Money Advice Service and local debt charities can advise on improving your financial situation.
How do I make repayments on a debit card loan?
Repayments are typically made on a monthly basis and will be taken from the same debit account the loan was paid into. Your repayment terms and timeframe will be agreed upon by yourself and your lender.
There are some advantages of setting up -automatic- repayments from the account you got your loan paid into:
- As all financial transactions will occur in one place
- You won't need to spend time transferring money between different accounts.
- You will always know when the next repayment will be taken.
- As there will be no risk of repayments being taken unexpectedly, you will find it easier to keep on top of your finances and avoid damaging your credit score.
To sum up, the virtues of a debit card loan are many, but you should also approach them with caution as they may not fit all personal and financial circumstances. However, if you are looking to borrow short term and pay back quickly, they can be an excellent option. To learn more about which debit card loans you could get accepted for and to start your application with Choose Wisely, click the Get Accepted button anywhereon this page.
Debit Card loans FAQs
Yes, it is possible to get a payday loan with just a debit card since a debit card proves that you have an active UK bank account. This makes it easier for the lender to check your status and credit history. It is also easier to administer a payday loan in this way because much of the work can be automated. In fact, most lenders will only approve applicants who have an active bank account.
Yes there are, the main one being an overdraft or credit line loan. Overdraft loans allow you to borrow a sum of money that will be attached to your bank account. As this will provide an added financial safety net, you can opt to either use or not use this money based upon your financial needs.
If your credit history prevents you from holding a bank account with a debit card, you might find it difficult to keep up with loan repayments. As interest rates will be high, it is often best to avoid taking out a loan with a prepaid card until your credit score improves. An improved credit score will provide you with access to cheaper forms of credit that will be better suited to your needs.