How Not Having a Bank Account Can Cost You

How Not Having a Bank Account Can Cost You

Last year the use of credit and debit cards overtook the use of cash for purchases, which was a huge signal, we are moving towards a cashless society.

Which brings up a variety of topics and questions to be raised.

One such question is if we do become a fully cashless society, then do we need ATM’s or cashpoints any longer?

In addition, by becoming cashless, how will banks and banking change?

One of the foundations of a cashless society is being able to make payments and purchases without the use of cash. This means you need a debit card or credit card, or some other means, such as a fob, mobile application, some way to make payment, without reaching into your wallet or purse and pulling out sordid cash.

This would mean you would require a bank account of some kind; to have wages or income paid into it, and also you to draw out payments/money to pay.

While it may be difficult to believe, not everyone has a bank account.

We may need a bank account, but over 1 million people in the UK do not have a bank account, and many have been “blocked” from having an account.

Bankruptcy and Bank Accounts

When someone is declared bankrupt, the Official Receiver can and usually will notify the bankrupt’s bank, and the bank will freeze, or possibly close the bank account.

This makes paying bills and financial life even more difficult, as if being bankrupt was not difficult enough.

The reason(s) why a bank may close the account can be for a variety of things:

* The person going bankrupt owed the bank money.

* The bankrupt had a Current Account, with access to credit, maybe in the form of an overdraft.

* The OR needs to verify the account is just a basic account.

Banks were also concerned about being “linked” to a bankrupt, and there were concerns and rule sin banking regarding this; even if no such relationship existed.

The laws and rules were changed, and a person in bankruptcy is allowed a basic account. However, they may wish to open that account prior to going bankrupt to insure no disruption of financial services, such as wages being paid in, and bills being paid out.

Once a bankruptcy has been discharged, opening a bank account should not be an issue, although you may not immediately be able to receive a current account.

So technically, even someone who has gone bankrupt, can get a basic account.

So Why Would Someone Not Have a Bank Account?

According to a new report there are in excess of 1 million people who cannot access a bank account. Many due to credit issues, but more often than not, it is they do not have sufficient ID, or could not show documentation to prove their address.

All of which is needed to open a bank account.

UK Finance, who represent the UK banking industry said, “The banking industry is committed to ensuring banking is accessible to all. There are over seven million basic bank accounts in the UK, helping customers across the country access vital banking services.

And not having a bank account only gets worse, as it can cost someone over £400 more a year for basic services and utilities.

Many Internet, gas and electric providers offer discounts if you set-up a direct debit to pay your monthly bills. Without this direct debit and a bank account, you will pay more for their services and subscriptions.

Even mobile phone carriers offer better deals to those with a bank account.

And there are many banks across the country that offer free basic accounts, however you will need proper identity and proof of residence.

So not having a bank account not only can be costly, but it may become more difficult in the future to use cash as we move further away from it.

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<strong>What is Our Criteria For Applying?</strong> 
Every lender on our website has their own specific criteria by the basics are mentioned below and you must have a guarantor to be eligible. Simply select the lender of your choice and you will be taken directly to their website where you can apply. You will be required to submit your details including:<li style=”text-align: center;” data-mce-style=”text-align: center;”>Name (must be over 18 as the borrow, 21 or 25 as the guarantor)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Residence (your chances will improve if your guarantor is a homeowner)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Employment status (must be employed or on a pension)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Income (earning at least £600 per month and able to make repayments)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Monthly expenses (not have too many loans open or in major debt)</li>
You will then be asked to include the details of your guarantor and as mentioned above, this is usually someone who you know and trust and wants to help you with your personal finances. Ideally, a guarantor with good credit will maximise your chances of being approved based on the idea of ‘if someone with good credit trusts you, well we can too.'<strong>How Much Can I Borrow From Guarantor Loans?</strong>Guarantor Loans gives applicants the chance to borrow £500 to £15,000 depending on the lender. Some lenders we feature like Buddy Loans only have a maximum loan value of £7,500 and TFS Loans is the only lender that stretches up to £15,000.Factors that can influence the amount you can borrow revolve around having a good guarantor. One that is a homeowner, with solid employment, income and good credit rating will maximise your chances of borrowing the largest drawdown possible.The lenders featured on Guarantor Loans see a homeowner as someone who has already gone through the rigorous process of credit checking and affordability and if they can afford a house, they should be able to act as a guarantor for you.By comparison, having a guarantor that is not a homeowner offers slightly less security and means that amount you can borrow is slightly less too.Higher amounts may be available to those who already have a better than average credit rating, are homeowners themselves and a repeat customer with the lender who has already paid their loan on time. To apply directly with your lender of choice see <a href=”” data-mce-href=””>direct lenders</a>.<strong>What Does The Guarantor Have To Do?</strong>Upon completing an application, the lender will typically send you a <a href=”” data-mce-href=””>pre-contract loan agreement</a> and SECCI (Standard European Consumer Credit Information form) which will highlight the terms of your loan. You and your guarantor will be required to review the terms of the loan, including the loan drawdown, fees, repayment dates and responsibilities – and this can be signed via an online verification process using your email and mobile phone.The lender will usually carry out an individual phone call with you and your guarantor to ensure that you both understand the responsibilities and what is required of you – notably that if you cannot make repayment, your guarantor will be required to pay on your behalf. Further to some additional credit and affordability checks, funds can typically be transferred within 24 to 48 hours (or sometimes on the same day).<strong>Are Guarantor Loans Available For Bad Credit Customers?</strong>Yes, even if you have a history of adverse credit, <a href=”” data-mce-href=””>CCJs</a>, bankruptcy or IVAs several years ago, you can still be eligible. The idea is that you are using your guarantor and their financial history to ‘back you up’ and give your loan extra security. However, it is noted that your guarantor should have a good credit score and consent to co-signing your loan agreement.<strong>How Soon Can I Receive Funds?</strong>Guarantor Loans works with lenders that can facilitate funds within 24 to 48 hours of approval, or sometimes on the same day.When your funds are successfully transferred, most lenders working with Guarantor Loans will send the full amount to the guarantor’s debit account first. This is a standard security measure carried out by lenders to ensure that the funds are going to the right person and confirms the involvement of the guarantor. The guarantor usually has a ‘two week cooling off period’ where they can decide to pass on the money to the main borrower or they can change their mind and return the funds with no extra charges.