Dos And Don’ts Of Doorstep Loans

Doorstep loans can be a great option if you ever find yourself in a situation where you need money, but you can’t get a regular loan from a traditional financial institution because you lack the necessary credentials. To learn more about them, look into The Comprehensive Guide to Doorstep Loans, and if you're interested in alternatives and how they stack up against a doorstep loan, you might want to consider comparing doorstep loans vs other similar cash loans.

Doorstep Loans Dos

• Do always pay your loan on time

  It should go without saying that you should pay your loan on time. You may think that a slight delay is not a big deal, but that does not set a good precedent and it will attract late fees and other trouble. Pretending you’re not home when the doorstep loan agent comes around is not a sustainable solution and does not make your debt go away, so keep that in mind.

• Do research the lending company

  You should know that companies need to be authorized in order to be allowed to lend you money. You should also know that there are plenty of companies that do not have proper authorization and pose as good-natured companies and unless you do your research, it’s difficult to tell the difference. Before you apply for anything, look into the lending company and check if they have all the documentation they need, if they have good reviews, a good history, good customer service, etc. In this field, scammers are very prevalent.

• Do ask for help if you’re having trouble repaying

  It is entirely possible for you to run into trouble when it’s time to repay the loan; it happens all the time, to people who never even expect it. The key is not to panic and not to give in to your first instinct of hiding from the agent when they come around to collect payment. Instead, if you’ve run into some financial trouble and can’t afford payments, go and talk to the company openly and together, you can work towards finding a suitable solution for everyone. They are as interested as you are in resolving this so they can get their money back.

• Do repay the loan early if you can afford it

  When you get a loan, there is a certain repayment term and schedule that you agree upon with the lending company. That can be a few weeks, several months, etc. But what people lose sight of is that you can repay the loan early, if you can afford it. There is no advantage to prolonging it; on the contrary – the more time you take to pay it, the higher the amount of interest will be. So every once in a while, review your financial situation and inquire about early repayment.

Doorstep Loans Don’ts

• Don’t make a habit of getting doorstep loans

  Doorstep loans should be the last resort to be used in an emergency situation when you’re in financial trouble and you have no other options. In that case, it is appropriate to seek a loan like this, but because it comes with such high interest attached, that makes it a less than viable and suitable option long-term. Many people fall into the trap of getting a loan, repaying it and then getting another one, so be careful to avoid that situation.

• Don’t get a loan if you can’t pay

  If you know that you can't afford the repayment instalments or even if you have no idea what your financial situation is and whether you can pay or not, do yourself a favour and do not get short-term doorstep loans. You would only be creating more problems for yourself and for the lending company that grants you the money. Look for a suitable alternative.

• Don’t borrow more than you need

  It can be extremely tempting to go for the maximum amount allowed, but that is a very dangerous thing to do. Remember that a loan like this is a last resort and it will need to be paid back, and with interest, no less. Taking more money than you need means you will have more money to give back and have a harder time making payments. Borrow the least amount of money possible in order to remain in control of your finances and don’t fall on a slippery slope.

• Don’t sign the contract without reading it

  This goes for any contract, no matter what it’s for – before signing anything, including Terms and Conditions! – you have to read everything carefully, front and back. Fine print, annexes, it’s all fair game, so you have to be 100% certain of what you’re signing and what you’re going to be on the hook for. You would not believe how many people have no idea what legal obligations they’re agreeing to because they fail to read the contract and later they have big, rather unpleasant surprises.

As you can see, getting a loan seems straight-forward, but it’s not as easy as it seems. Even a loan option like doorstep loans, which make it simple for you to get a loan, has hidden risks and things you need to keep an eye out for, so don’t go into a transaction like this without first thinking about what steps you need to take. You can make sure that you don't trip up by looking through our tips for successful repayment of doorstep loans article.

You can check your credit report at Experian.