You may not have a bank account for multiple reasons. You could be a student just starting the financial journey, prefer dealing in cash for small and medium needs, etc. Having a bank account is beneficial in multiple ways. It helps you benefit from the interest on your savings. Moreover, it helps qualify people for affordable credit cards, loans, and mortgages at low APR. Alternatively, the individual struggles and this slows down the lifestyle journey.
Why is it essential to have a bank account?
Having a savings or current account helps you maintain a transaction history. You use the bank account for short and medium-term needs. Whether you withdraw money or use internet banking, you cannot do it without a bank account number. This long history of transactions and income credits helps you build your account history and credit score.
Moreover, lenders analyse this credit history to verify your income and outgoings for a quick loan. It helps them understand the risk of lending money to you. The bank statements stand as firm proof.
You may need one in case of cash insufficiency or emergency. Not having a valid bank account may delay the process. In that case, the provider may struggle to analyse your finances and affordability. This is the reason why many finance service providers mandate a bank account. It is a part of the initial credit and financial assessment.
Do all loan providers ask for bank account verification?
No, not every loan lender requires bank account details to approve a loan. Instead, they help individuals with quick cash at home. For this, a borrower must provide proof of relevant and authentic income. Income proofs like- salary/pension/part-time income or income from self-employment/ self-assessment count as valid proof.
Yes, you may get some loans just for proof of income. Here are some examples of the same. You can tap these options if you need a loan and want money fast at the doors. No, you don’t need a bank account to get a loan in these cases.
1) Payday loans
These are income-based loans with a same-day payout facility. As the name suggests, these are pay-day or salary-day loans. Precisely, you may get up to £1500 for emergencies and repay with the next salary day. The provider analyses the income to understand the affordability. If you want, you may get it offline, too.
2) Doorstep loans
It is one of the most popular ways to fund a small emergency at home or in the office. It is especially for individuals lacking a bank account or credit history. You may get up to £1000 for your needs. You can use it for any small purpose, like a medical emergency. It is also ideal for individuals with mobility issues or old age.
3) Loans for no credit score
It is for individuals with no credit history or score. It could be ideal for students starting their university years and financial journey. Such people lack a bank account and credit history. However, if you can prove the affordability with the best income and fill out the authentic details, you may quickly get loans for no credit score. You can get up to £5000 for your requirements quickly.
How can you get a loan without a bank account quickly?
Without a valid bank account your options to secure a fast cash loan are limited. This is due to the verification limitation that individual lenders face. They struggle to calculate or analyse affordability in the absence of a bank account and a credit score.
You cannot have a credit score without a bank account. Therefore, it is more than essential to ensure a regular bank account. However, emergencies do not consider your existing financial status. If you must, you can get a loan without a bank account. Here are some ways to improve the chances of getting a loan without a valid bank account:
1. Improve your credit utilization ratio
One important parameter for maintaining a healthy financial score is the ratio of debts to current income. A credit utilisation ratio of 30:70 is generally good. Thus, work on improving it by boosting income.
Check the best part-time incomes and passive income modes to boost them. Rest assured, avoid taking credit cards unnecessarily. You can also work on ensuring a healthy credit history with regular bill payments.
2. Gather important documents for proofs
You need to provide additional documents to get loans without a bank account. For example, provide proof of additional income, such as rental payments, dividends, part-time income, etc. Apart from this, provide proof of residential address or tenancy agreement.
It will help you establish credibility in your application. You may also provide personal ID proof, such as a license, passport, ID card, etc., for verification. Providing all authentic documents may improve your chances of qualifying.
3. Get a guarantor
A guarantor may help secure finance quickly. He is someone known to you. The loan provider considers the income and finances of the guarantor when providing a loan. The guarantor must own a bank account to qualify. A guarantor with a decent financial history and credit score may be eligible. It may help you fetch quick cash on the same day at better interest rates.
Before hiring a guarantor for your needs, check the feasibility. Can you trust the person with your finances? If yes, then it could prove a vital option to get instant cash assistance. You may meet your needs quickly by doing so.
4. Provide a security
A secured loan may help you get finance if you lack a bank account. Though getting one without a bank account is challenging, some may provide it. You may provide any asset, such as a car, furniture, or property, to get the loan. However, it may not be helpful if you need only a small amount.
Bottom line
Getting a small loan without a bank account is challenging. However, you may try other aspects, like getting a loan guarantor. It will help you get instant finance for your needs. Alternatively, improve your prospects of getting a loan by boosting income, reducing expenses and getting a bank account.
Lisa Ann has developed a well-experienced professional career. From managing the staff of more than 50+ loan experts at Fastmoneyfinance to boosting the delivery of various loan offers, she has acquired many challenging roles to come out with the best results for the company. Lisa Ann is a Senior Content Author and the Chief Financial Advisor at Fastmoneyfinance. To back her massive experience in the UK’s financial industry, she has the postgraduate degree and diploma in Business and Finance.