Can I get a loan with no bank account?
It can be difficult to get a loan without a bank account or a savings account. However, there are some specialist services, such as loans with no bank account products, that provide what is known as ‘doorstep loans’.
These loans with no bank account can be more expensive than other forms of loans because you will be a higher risk for the lender. However, no bank account loans or doorstep loans can be a good way to rebuild your credit limit. They can also show that you can handle credit by meeting your repayments on time every month.
Why do banks and loan companies need you to have a bank account?
Every online UK direct lender will require you to have a bank account for the following reasons:
- Banks need to see that you have the funds needed to make your repayments against a loan
- They will need a bank account to actually pay your money into
- They need the facility of the bank account to be able to set up a continuous payment authority or direct debit to collect the repayments
However, as not everyone has a bank account for a number of reasons, there are other options for people requiring specialist loans with no bank account.
What are alternatives to no bank account loans?
Cash loans are a popular alternative to bank account loans. These are sometimes called doorstep loans. Customers can start an application online but it will usually be finalised by a representative of the loan company in the applicants home. If accepted, some providers will deliver cash to your home or some require you to pick it up in branch.
As you won't have a bank account to take payment from, the lender will carry out a different process to make sure you can repay the amount that you have borrowed, plus interest. Among other things they will look at your disposable income, the amount you have available after your bills go out. Repayments will be collected by the lender's account manager on a weekly or monthly basis, at your home. With some cash lenders it's possible for you to make the repaymenst locally, at a lender branch. It's important to know that the interest rates on these types of loan can be high.
Drawbacks of doorstep loans
The interest rates on cash or doorstep loans tend to be extremely high. This is because you represent more risk to the lender. Another thing to remember with no bank account loans is that they tend to come with very heavy penalty fees if you don't stick to your repayments. Failure to make repayments can also have a serious negative impact on your credit score.
This means that you should only take out a no bank account loan if you are certain you will be able to pay it back along with the interest that the lender will tell you about. Otherwise, you could find yourself in more serious financial trouble.
Applying for a cash loan
To get the right kind of loan for you and your financial circumstances, follow Choose Wisely’s Get Accepted application process:
- Fill out our secure application form online in less than two minutes
- Choose the loan you want from our selection of lenders who will accept your application
- Finalise your application with your chosen and if your successful you could receive your money within an hour of being accepted
No bank account loan FAQs
Lenders will need information to ensure you can afford to pay back the loan over an agreed amount of time. They will do a hard credit search when you complete the application on the lender’s site. Before that, ensure you check which lenders will accept your application on Choose Wisely.
If you have bad credit and are looking for a bank account, your best option is a basic bank account. Basic bank accounts are products designed for those with poor credit scores. As the name suggests, these accounts offer a place for you to store your money and pay bills from, though they don't come with overdrafts.
Most banks offer a free bank account option. There are a variety of bank accounts that charge a monthly fee and usually offer some sort of benefit with the bank account but if you just need a starting point to store your money and pay bills from, a basic bank account will be a great way to start managing your finances.