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Last Updated: Tuesday, 22 November 2005, 15:13 GMT
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.

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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 for a list of its members.

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

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.

These organisation can help you with information and advice:

  • Association of British Credit Unions - an information and news site about credit unions in England, Scotland and Wales

  • Scottish League of Credit Unions - information about Scotland's credit unions

  • 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.

  • Jobcentre Plus - provides help and advice on jobs and training for people who can work and financial help for those who cannot.

  • Department for Work and Pensions - has information and advice about benefits to which you may be entitled.

  • The Pension Service - gives impartial UK government information on state and private pensions.

  • Citizens Advice - an online service that provides independent advice on your rights.

  • Connexions - information and advice for young people.

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