Doorstep loans are an excellent option for people who need a quick, easy financial fix with minimal hassle, but while they provide many benefits for certain categories of people, they can also have drawbacks, so they’re not suitable for everyone. Are you a good candidate for doorstep loans? And what other options are there? How does a doorstep loan hold up against these other similar types of loans?
We’re going to compare four different, but similar types of cash loans and see what they each have to offer and if there are any superior options or if it is just a matter of preference and needs.
A Quick Rundown of Doorstep Loans
If you want to read about them in more detail, we recommend checking out Our comprehensive guide to doorstep Loans, but right now, we’re going to do a quick summary.
- They are convenient loans that come to your doorstep
- They’re good for people with limited time or mobility
- They accept people with bad credit
- You can get the money quickly
Basically, if you want a cash loan that you will get quickly and with the least amount of effort possible, doorstep cash loans may be for you. The interest rate is high, but that is true for all cash loan options with little to no security for the lender. If you plan on applying, you may find it helpful to read up on the dos and don’ts of doorstep loans.
Payday Loans vs Doorstep Loans
Payday loans, as the name suggests, are cash loans you get until your next pay check, when it's time to repay them. These loans can be real life savers when you're in an emergency, and you need cash very quickly and with no questions asked, especially since it's possible to get your money instantly. For this reason, understandably, payday loans are not given in very high amounts, and you can get as much as £1000.
The thing you need to be mindful of is that late payment will bring very high rollover costs, which can put you in more financial trouble than you were in to begin with. It’s a risky game to play. That is why a payday loan is best only used in emergency situations; it's not something to rely on constantly and make it into a lifestyle, which is a genuine possibility.
Same Day Loans vs Doorstep Loans
Same day loans are cash loans you get on the same day, which is why, like payday loans, they are also very good for emergency situations when you need financing fast. Same day loans are often advertised as bad credit loans because they do not require perfect credit. The application is usually filled out online, and you get a quick response on whether or not you are accepted, which enables you to receive the money on the same day.
This type of loan can typically go up to £1000, but it depends on the criteria for approval. There are some that allow loans of £5000, £10000, or even £25000, but obviously, the criteria will be much stricter, unlike doorstep loans and all the other options mentioned.
Small Guarantor Loans vs Doorstep Loans
A small guarantor loan may seem more prohibitive, because it does require someone to guarantee for you. However, the main advantage of this kind of loan is that it is made especially for people with bad credit, who encounter tremendous difficulty when trying to get a loan elsewhere. A guarantor allows you to still borrow money, because you offer some type of security to the lender. The good news is that a guarantor does not necessarily need to own a home.
While the amount you can borrow is small at £750, you can receive this cash loan on the same day you request it. What is more, the repayment term is a massive advantage: unlike payday loans, which you need to repay within 3o days, you can repay small guarantor loans over a longer period, between 6 and 24 months.
Instalment Loans vs Doorstep Loans
Instalment loans come with a clear benefit of allowing you to borrow more money than the other alternatives, at around £2000. This is also one of the loans that you can repay over a longer period, maximum 24 months, so it is suitable for other purposes as well, not just urgent payments. If you can't afford to repay the entire loan right away, this may be the option for you. Of course, if you do find yourself in a position where you can afford to repay the loan early, you have that option.
Another point to note here is that you do not need a guarantor, but because of this lack of security to the lender, this loan will come out to be more expensive, especially if you choose to pay it over the maximum period available. The other cash loans are comparatively cheaper, while offering some of the same advantages.
| What does each loan have to offer? | ||||
|---|---|---|---|---|
| Doorstep loans | Payday loans | Same day loans | Small guarantor loans | Instalment loans |
| They accept bad credit They come to you Possible same day pay-out | Possible same day pay-out Up to £1000 For emergencies | Same day pay-out Usually up to £1000 Accept bad credit | Up to £750 Can repay between 6 and 24 months Guarantor doesn’t need to be a homeowner | Up to £2000 Can pay over 24 months Can repay early |
All in all, as you can see, when it comes to cash loans, the ones from doorstep loan companies are far from being the only option available. There are plenty of choices for different needs and preferences, but the question is if they are suitable for you or not. Study each option carefully and choose wisely depending on what you are looking for and what your financial situation is. You can get a copy of your credit report from Experian.