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Why are Doorstep Loans So Popular?

Doorstep loans, also referred to as ‘home credit’, are a convenient way of borrowing money for a short period of time. You can borrow up to £500 from authorised home credit lenders, and repayments are collected on a weekly or fortnightly basis from your home. Due to the ease of repayment and clarity of doorstep loans, this method of borrowing has grown more popular in recent years.

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If you want to learn more about home credit, or you’re in need of a more convenient way to borrow money – look no further. In this article, you’ll discover the benefits of doorstep loans and why they have become so popular. Read on to learn more.

What are doorstep loans?

Doorstep loans allow you to borrow money from a local agent and the funds are delivered directly to your door. Rather than having the money transferred to your bank account, you’ll receive cash from your agent who will then visit your home weekly to collect your loan repayments.

You can also receive trading cheques and vouchers as an alternative to cash. These are usually exchanged for clothes or furniture from a range of retailers.

This method is usually used for short-term borrowing, and it is generally more expensive as you’ll get charged a higher rate of interest compared to standard loans. However, it’s important to note that your repayments will not be reported back to your credit reference agency, and as a result borrowing in this way will not improve your credit score.

To distinguish between doorstep loan providers and loan sharks, the Financial Conduct Authority (FCA) requires that all home credit lenders must be authorised by them. Therefore, if someone offers you a loan on your doorstep, you should always ask them for their authorisation or check the FCA official website to see if the organisation is licensed before agreeing to borrow any money.

Who can get a doorstep loan?

As mentioned above, home credit loans normally have a higher interest rate than standard loans, therefore, you should make sure that you will be able to afford the repayment costs before taking out a loan.

If you have a poor credit history, you can still be considered for a doorstep loan. However, making an application will show up on your credit file, so it’s important not to make too many loan applications within a short period of time to protect your credit rating.

This borrowing method is cash-based; therefore, you do not need to have access to a bank account to borrow money. As well as this, you don’t need to be a homeowner to access funds as some credit lenders will provide unsecured loans to those in council houses or house-shares.

Benefits of Doorstep Loans

There are a number of benefits of borrowing on your doorstep, however, it’s important to weigh these up against to costs to ensure you’re making the best financial decision. Below, we’ve listed the key benefits of doorstep loans to help you make that all-important decision.


One of the main reasons that this loan method is so popular is due to its convenience. Your funds are delivered straight to your door and your agent will revisit your home on a weekly basis to collect repayments.

This is a great option for elderly people, those with limited mobility, or for those who simply would prefer to deal with lenders face-to-face rather than over the phone or online.

Available to those with poor credit

Aside from loans with no credit checks, most lenders will perform a credit check before deciding whether to give you a loan.

Home credit lenders tend to look at a range of other factors as well as your credit score, so even if your rating is below average, it’s likely that you’ll still be considered for a loan.

Shorter waiting period

Due to the nature of online loans, it normally takes a long time for the money to reach your bank account once you’ve made your application.

This is usually because it takes additional time to check your application and credit rating, plus application processing and bank transfer times can delay your payment even more. Therefore, if you need the funds quickly, this is not the easiest method to get paid within a short period of time.

Doorstep loans simplify this process with the use of an agent. The agent meets you face-to-face to discuss and process your application in person, and as a result you can receive your money much quicker. As well as this, some lenders even offer same-day doorstep loans if you need the cash as soon as possible.


Dealing with an agent in-person can provide more clarity, which is another key reason why doorstep loans are so popular.

Online loan applications can quickly get confusing with the lengthy application process and jargon that goes with them. Whereas, meeting with an agent gives you the opportunity to ask questions and gain a better understanding of the process. This helps you to reduce the risk of making mistakes with your application, and all misunderstandings and queries are dealt with in person.

Weekly repayments

With these types of loans, you’ll have to pay your lender back on a weekly basis. This is a practical alternative to standard loans as your weekly repayments are usually a small, manageable amount rather than a lump sum; making it easier to stay on top of your repayments. Here are some tips for successful repayment of doorstep loans

Despite all the advantages of doorstep loans, it’s crucial that you consider the costs so that you don’t worsen your financial situation in the long run. Keep in mind that this type of borrowing is more expensive than other methods because of the added costs of hiring agents. As well as this, your repayments won’t contribute towards your credit rating, so if you want to gradually improve your credit score, it may be worth looking at a low interest credit card as an alternative to doorstep loans.

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