Disclaimer: Our website and publications aim to give you general information to help you make financial decisions. It is not advice, nor can it take account of your own particular circumstances. For advice with a view to making decisions about your own circumstances you should consult a financial or other professional adviser.

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More about borrowing without a bank account

Even if you don’t have a bank account you can still borrow money if you need to. However, you will need to be especially careful about choosing your lender and checking the terms and conditions of the loan.

Check the Annual Percentage Rate (APR) on any loan offered and work out how much you will have to pay back in total over the lifetime of the loan before signing up. (The APR is a standard way of stating the cost of a loan taking into account the interest and other charges, such as any arrangement fee. The higher the APR, the more expensive the loan.) However, you might decide the cost of such a loan is outweighed by its convenience.

If you already have debts, think carefully before borrowing more, particularly if the new loan is an attempt to pay off your existing debts. See More about: Increasing your borrowing

Alternative sources of credit

Here are some alternative sources of credit if you don’t have access to banks and other mainstream lenders:

Credit unions: these are mutual organisations offering savings and loans. They are run by and for people who have a common bond, such as living in the same area or working for the same employer. Check at work to see if there is a workplace credit union you could join. Your local authority should have a list of community- based credit unions active in your area or check with the Association of British Credit Unions Limited for a list of its members (see link).

Social Fund: this is part of the state benefit system, which can provide loans and grants. But these are generally available only to people receiving qualifying state benefits and the refusal rate is high. For information and to check eligibility, contact your nearest Jobcentre Plus if you are of working age. If you are of pension age, contact The Pension Service. You can also check with Citizens Advice.

Doorstep lenders (sometimes known as ‘home credit’): money lent to you by ‘doorstep lenders’ (such as salespeople who come and knock on your door) can be expensive. If you do consider taking out a loan from someone who comes to your home, in addition to checking the APR you need to think about the following:

  • Ask to see their lender’s licence or other authorisation. (If they don’t have one, they are operating illegally, so don’t use them.)
  • Be clear about the amount you are borrowing, how much you must repay and for how long you will be making repayments.
  • Ask how much in total the loan is going to cost you.
  • Make sure you understand what will happen if you can't keep up the payments.

Contact numbers and internet links

  • Association of British Credit Unions is an information and news site about credit unions in England, Scotland and Wales.
    www.abcul.coop
  • Scottish League of Credit Unions has information about Scotland's credit unions.
    www.scottishcu.org
  • Trading standards: local trading standards services can take action when traders break consumer law. If you want advice about whether a creditor or debt collector is acting unlawfully e.g. by harassing you, you may wish to contact trading standards. But they are unlikely to be able to provide you with debt or money advice. Details of your local trading standards service can be found in your local telephone directory.
    www.tradingstandards.gov.uk
  • Jobcentre Plus provides help and advice on jobs and training for people who can work and financial help for those who cannot.
    www.jobcentreplus.gov.uk
  • Department for Work and Pensions has information and advice about benefits to which you may be entitled.
    www.dwp.gov.uk
  • The Pension Service gives impartial UK government information on state and private pensions.
    www.thepensionservice.gov.uk
  • Citizens Advice is an online service that provides independent advice on your rights.
    www.adviceguide.org.uk
  • Taxaid is a free tax advice to people who cannot afford to pay a professional adviser. The service is independent and confidential.
    www.taxaid.org.uk
  • Connexions has information and advice for young people.
    www.connexions.gov.uk
  • LendersCompared.org.uk allows you to compare home-collected loans available in your area.
    www.lenderscompared.org.uk