Table of contents
- What are doorstep loans?
- How do doorstep loans work?
- How much can you borrow?
- How do you apply?
- Do it online
- What happens when the agent comes over?
- What's a good reason to require a loan?
- Do you have to decide instantly?
- When/how do I get the money?
- When/how do I repay the loan?
- How much interest do you pay?
- Who can take out doorstep loans?
- What are the benefits of?
- What are the drawbacks?
- What companies offer doorstep loans?
What are doorstep loans?
Some of the most convenient loans you can take out are doorstep loans, also known as home credit loans. These are doorstep cash loans that you repay at home, with the lender coming to your doorstep to collect the money, hence the name.
Just like with any other loan, there are benefits, as well as possible drawbacks; they are better suited to some people and their needs than others. Here is all you need to know about doorstep loans so you can make an informed decision about whether or not this kind of loan is right for you.
How do doorstep loans work?
They are usually approved after a face to face meeting with the lending company. They're unsecured cash loans in small amounts and high interest, with weekly repayment at your doorstep.
How much can you borrow?
Doorstep loans are small cash loans, so the amounts offered are generally between £100 and £1000, at most. The majority of companies offer loans up to £500, but the amount you can receive depends on the company, location, and their individual assessment of your application.
How do you apply?
Generally speaking, there are two ways to apply:
Do it online
The easiest and most time-efficient way is to apply online, which will require you to fill out a form with any pertinent details. The benefit of this option is that you can do it at your own pace and/or leave and return to the application to be completed whenever it's convenient for you.
Once you've submitted your details – either online or by phone – and your application has been reviewed, the loan provider will send someone to your home to finalise the transaction face to face.
What happens when the agent comes over?
The company will get in contact with you about sending a doorstep loan agent over to discuss the loan with you in person. You don't have to travel or make time to leave the home for this meeting. Whether you're in Liverpool, or Lizard Point, the most southerly town in the UK, the lenders agent will come to your house for your convenience. The only thing you need to do to set it up is agree to a date and time to receive the agent.
When the agent is at your house, you will discuss your circumstances, as expected. Be prepared to provide information on the reason you're applying for the loan, as well as the state of your finances.
What's a good reason to get a loan?
The good news is that a loan can be requested for any reason and the agent will not pass judgment on what you tell them. They are there to help guide you towards the best financing option for you, whether it's for an urgent bill, debt, or a personal expense. You will be offered several options, based on your financial situation.
Do you have to decide instantly?
N0, you do not have to decide instantly. You will be given an offer detailing everything regarding your loan, including interest and the circumstances for payback. You can take as long as you like to weigh your options and decide what suits you best. When you've come to a conclusion, all you have to do is contact the agent and let them know.
When/how do I get the money?
After you inform the loan provider of your decision, they will take care of the rest. After a short wait, they'll show up on your doorstep to drop off the money. This is the final step of the transaction until it's time to start making payments.
When/how do I repay the loan?
The circumstances of your loan will have been discussed and agreed upon before you receive the money, so you don't have to worry about being blindsided when repayment time comes around.
What will happen is that the loan will be repaid in instalments, with the doorstep loan agents showing up at your home to collect each time. The transaction is quick and convenient, and doesn't require you to step out of your house.
How much interest do you pay?
The rate you pay depends, of course, on the business you've chosen to work with and the option you've picked from their offer. As a general rule of thumb, the longer you take to repay the loan, the higher your rates will be. Where repayment and interest are concerned, there are two options to consider:
Pay higher amounts in fewer instalments
This is best if high interest is a concern for you. The faster you repay the loan, the lower your overall repayment will be and you eont be so much out of pocket. This is a great solution for someone who's in a pinch and needs to take an urgent, one-time loan until they find money from a different source.
Pay lower amounts in more instalments
This will result in a higher rate, but it offers the advantage of allowing you to pay over a longer period of time and make smaller payments. This is ideal for someone who does not have consistent income or cannot afford to make large payments.
Who can take out doorstep loans?
One of the greatest things about such a loan is that anyone can apply and be approved. It has the most advantages for disadvantaged members of society – individuals with a lack of resources or bad credit, people who don't have time to shop around for loans or go out and make repayments every week, individuals who are disabled and have limited mobility, etc. Are you among these categories? See if a doorstep loan is the right option for you:
If you have bad credit
Bad credit can severely affect your financial situation and it will definitely stop you from being approved for loans from banks and other traditional loaning avenues. This creates a vicious circle where an individual acquires bad credit because of dire financial circumstances but then cannot bring his credit up because no one will grant him a loan. This ends up disproportionally affecting low-income individuals.
They can be an excellent solution – or sometimes, the only one – if you've hit a rough patch financially and you need some help to get back up on your feet. When everyone else will reject your loan application, home credit companies won't.
If you are unemployed
Generally speaking, you need proof of income for any kind of traditional loan, which makes it next to impossible for unemployed individuals to be approved for one. This becomes a real problem, because then you have no options for financial recovery.
Doorstep loans don't require you to have an income, so this gives anyone a chance to apply and receive the money they need.
If you are disabled
Applying for a loan of any kind can involve a lot of paperwork and several trips to the bank or loan provider that can render the process prohibitive for individuals with reduced mobility.
This type of loan can be a disabled individual's only chance to be able to apply for and receive a loan quickly, easily, and conveniently.
What are the benefits of?
There are many benefits to enjoy in a doorstep loan, which is why it's such a popular choice among numerous categories of people who generally have circumstances that hinder them from pursuing a more traditional type of loan from a bank or a different institution.
You get the money quickly
Unlike traditional loans, with long application processes and an even longer time to wait to be approved and then receive the money, home loans enable you to get approved and get the money immediately.
How quickly you get the money depends on how quickly you decide on an option from the offer you receive from your doorstep loan agent. Once you make the call, it's just a matter of waiting a short while for the agent to come around and drop the money off.
You don't have to leave your home
Perhaps the most important benefit is the convenience provided by a loan like this. Normally, pursuing a loan entails multiple visits to the bank, going around gathering the necessary paperwork, and making trips for every single step.
Doorstep loans enable people who are confined to their homes to have access to a service like this and be granted a loan that would normally be very difficult or even impossible to obtain without outside help.
Every step of the transaction is taken care of by the agent sent by the company and they come to your home to discuss options, finalise the paperwork, drop the money off, and then later to collect it. You don't have to lift a finger or take even a step outside your home.
There are no credit checks involved
It can be daunting to apply for a loan, partially because of the credit check. If you have bad credit, you won't be approved at all, and even if you have less than stellar credit, there is always the possibility of being rejected and having your credit score negatively affected. It's a catch 22.
Doorstep loans for bad credit make it possible for individuals without perfect credit to be approved for a loan and be able to pay off whatever they need quickly and easily.
The paperwork is minimal
What is one of the most irritating parts of applying for a traditional loan? The seemingly never-ending amount of paperwork they ask for. You wil need to submit numerous documents and make several trips back and forth to deliver them all.
This non-traditional loan transaction can be completed with minimal paperwork. All you have to do is provide your details in the beginning, either by filling out a form or giving them out over the phone and then offer the agent your financial information.
What are the drawbacks?
Like any loan, there are also drawbacks to getting a doorstep loan. This can be a good solution for some people, but it's wise to be aware of possible risks.
The interest rate is higher than on a regular loan
It's well known that a loan like this comes with a higher rates because of the lack of checks and lender security, so make sure to take that into account when applying and planning repayment.
You can become financially reliant on the loan
An option like this is typically meant to be helpful in a pinch, not to be used constantly. If you can't afford your lifestyle, you risk becoming reliant on this kind of loan.
You can encounter poor practices
There have been cases of companies who employ poor practices like pressuring clients in order to make a sale or not performing proper affordability checks, thus putting clients in a precarious financial position. Double-check who you're borrowing money from. To find out more check out our pros and cons of doorstep loans.
What companies offer doorstep loans?
There are numerous doorstep loan companies; what you have to be careful about is authorisation. Not all the companies that advertise these loans are actually allowed to offer them, so your best bet is to check the Register on the FCA website at http://www.fca.org.uk. Here is a comprehensive list of companies that offer doorstep loans:
If you can't find a local company near you, use our Doorstep Lender Search, which will enable you to find a company locally.
In addition, you can also rely on our partners to get a doorstep loan today:
- Provident Loans
- Morses Club
|Doorstep Loans Summary
|How do they work?
|The process is simple – you only have to contact the company and give them your info and they'll send someone to your house to assess your circumstances and present you with some options. Once you pick one, you will have the loan delivered to your door.
|Who can get a doorstep loan?
|Anyone can take out such a loan, but this choice is especially good for people who have no other options, like disabled individuals, unemployed ones, or people with bad credit scores.
|What are the benefits?
|They are cash loans on your doorstep that are convenient, with minimal paperwork and no credit checks.
|What are the drawbacks?
|Not all companies are authorised and some of them engage in poor business practices.