Basic Bank Accounts for Young People With No Credit Checks

There are hundreds of different types of accounts available at banks and building societies. Some offer basic bank accounts to help you manage your money.

What are Basic Bank Accounts?

A basic bank account allows you to receive money and pay bills. It can be a first step towards opening a regular current account later on.

With most accounts you can:

Have your wages, benefits or tax credits paid directly into your account

Pay in cheques for free (but you will have to wait a few days before the money is available for you to spend)

Withdraw money at cash machines with a cash card (this is usually free, but some convenience cash machines make a charge)

Make cash withdrawals at the Post Office

To help decide which would be the best account for you, you'll need to compare the different features and decide which ones are important to you. None of them ask for a minimum amount to open an account.

Why choose a basic bank Account?

Basic bank accounts are designed for people who may have difficulty in getting other bank accounts because of age, low income or credit problems. Those not wishing to get into debt often prefer these accounts as you cannot become overdrawn.

Basic bank accounts do not normally provide an overdraft facility and do not offer a cheque book or multi-function cheque guarantee cards.

Almost all basic bank accounts offer the facility for Direct Debits and Standing Orders. Almost all banks will make a charge for Direct Debits and Standing Orders which aren't paid because you don't have enough money in your account to pay them. Banks may cancel Direct Debits and Standing Orders - and may even close accounts - if you don't have enough money in your account to pay them on more than one occasion.

How do I open a Basic Bank Account?

When you have decided which type of account to open, you will need to obtain an application form from the bank or building society.

Most banks and building societies will help you to complete the form, or you can go to your nearest Connexions Centre where a Personal Adviser can help. When you have completed the form, you will need to return it with your proof of identity and proof of address.

You must have two separate proofs, eg, a driving license can be used as proof of either identity or address, but cannot be used for both. Many of the banks have different approaches to their identification requirements for younger people. Don't be persuaded to open an account you don't think you'd be able to manage.

Some groups (including but not limited to benefit claimants, refugees, asylum seekers, people on probation and Travelers) may need to produce specific types of identification.

Those with a record of fraud, who are undischarged bankrupt or, in some cases, have a record of bad debts, may have their application declined.

Always check with the bank or building society of your choice to find out their exact requirements for proof of identity and/or address.

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How Student Loans With No Credit Checks Are a Positive Option

Education is very expensive, but the investment is necessary if young people are to have any chance of beginning a meaningful professional career. For the vast majority to college-goers, there is no lump sum sitting in their bank account with which to cover all the costs of school. Instead, loans are needed, and getting a student loan with no credit checks is a favorite option.Whether applying for funding from private or public sources, there is a need to meet the necessary criteria. The big question, however, is how students can be allowed to take out sizable loans to cover the cost of tuition, or even the cost of living, without any credit checks being carried out on them. Well, getting approval despite bad credit is not that difficult when the system is known.
The good news is that the terms of a typical privately sourced student loan are quite accommodating. The bad news is that the interest rate on these loans is usually poor, even if repayments are not required to be made until graduation.

What Are No Credit Check Loans?

Normally, an applicant for a loan is checked out by the lending institution before approval can be granted. The reason is that the credit history reveals the degree of risk that is involved in lending to the particular person. But credit checks are not carried out by all lenders. A student loan with no credit checks is a perfect example.
All students are considered bad credit borrowers. It is not because of a poor credit history, since the vast majority of students have only recently come from high school. It is actually because there is little or no record of activity. For this reason, and even if getting approval despite bad credit is possible, the terms are not always ideal.
Of course, not checking credit histories out means even those with the worst histories have a chance to secure the student loan that they need.

Ensuring Loan Approval

Lenders have a more open attitude towards lending to students, mostly because they understand education is an investment in the future. So, most people are able to access at least a private loan. However, accessing a student loan with no credit checks makes the whole job a little easier.
But that does not mean that approval is assured, with concerns over being able to repay the loan the overall factor that lenders are consumed by. Proactive steps need to be taken in order to maximize the chances of getting approval despite bad credit, and building towards a better personal financial future.
True, with a period of grace provided before repayments must begin, and with the general support of government and lending institutions, student loans are the easiest loans out there to secure. However, an ability to repay still needs to be established.

Use a Cosigner

The most effective way to all but guarantee a student loan with no credit checks is to include a cosigner in the application. This is significant because the cosigner guarantees repayments will be made. And with a reliable income and an excellent credit history, they can also handle the repayments of these loans practically immediately.
Of course, getting approval despite bad credit is no great trick when lenders universally consider students bad credit borrowers. But the cosigner removes the risk element and so the interest rate to be charged can be lowered, thus making the loan more affordable anyway.
So, when student loans are available without any credit checks carried out, it is effectively a win-win situation.



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