Let’s say you’re in a bit of financial trouble and you’re looking for a loan, but can’t decide between home credit loans and other unsecured loans. They all seem similar, and you can't determine if the benefits and drawbacks of a home credit loan weigh in your favour or not. Read our comparison of home credit loans and other similar unsecured cash loans and see which one is more suitable to your financial situation.
Looking Into Home Credit Loans
What are home credit loans?
Home credit loans, also known as doorstep loans, are loans you get on your doorstep. The entire process is carried out from the comfort of your home, including application, document signing, receiving the money and paying it back. An agent comes by and takes care of everything for you.
Because there is no collateral and no credit check, the interest rate is quite high. However, you can repay the loan in instalments over several months. This kind of loan can be the perfect solution, or it can be a mistake. Before deciding, read the top things to consider when taking out a home credit loan.
What do they offer you?
- Cash loans
- Quick money
- Minimum paperwork
- Easy application process
- Convenience
- No collateral
- No credit check
- An average maximum loan of £500
The majority of the people who opt for home credit do so because of the convenience it offers. It’s incredibly quick and easy to apply and receive your money, and it does not require much effort at all. It eliminates the need to leave the house, go to the bank, sign mountains of paperwork, and the back-and-forth.
In addition, a home credit loan has an important advantage: it does not require you to have impeccable credit, collateral, or even income. There are options available for most people, and regardless of your financial situation, you should find something suitable for you and your needs.
The loan amount is not large, and the interest rate is high. That may or may not be a problem for you, depending on what you need the loan for and for how long.
Who should get one?
There is practically no limit on who can take out a loan like this, but there are people who are more likely to opt for it. If you’re looking to borrow a small amount of money for an emergency, this can be the loan for you.
In addition, people who are disabled or who have a hard time getting accepted for regular loans might benefit from home credit loans for people with bad credit.
Looking Into Unsecured Loans Vs Home Credit Loans
What are unsecured loans?
Unsecured loans are loans that you don't need to provide collateral for. When you get a secured loan, you need to put an asset up as collateral, in order to ensure the safety for the lender should you default on your loan. An unsecured loan does not come with this requirement, but i offers access to lower amounts of money and you pay higher interest for it.
What do they offer you?
- No collateral
- No need for perfect credit
- Quick money
- A variety of options to choose from
- Repayment in instalments
- Loans up to £50,000
People get unsecured loans because they do not have significant assets to put up as collateral. From this point of view, they may seem like less of a commitment than a secured loan. The major advantage compared to home credit loans is the higher amount you can borrow, which goes up to £50,000. Of course, this depends on how good your credit is.
Unsecured loans also offer fairly good variety – there are payday loans, guarantor loans, peer-to-peer loans, personal loans, credit cards, etc. There is something for everyone, depending on what you’re looking for and what your financial standing is like.
The good thing about unsecured loans is that you can rely on them for a major purchase, as long as you have the credit score to back it up. Because the repayment of a larger loan like this is made in instalments over months or even years, it's more manageable. However, the interest is high and will drive up the total amount you need to repay.
Who should get one?
It is advisable to opt for unsecured loans if you do not have collateral, but perhaps have good credit or someone who is willing to co-sign as a guarantor. This type of loan is perfect for a more expensive purchase or to pay off a large amount of debt, because you have access to more money. An unsecured loan is perfect for students and other young individuals who have not yet acquired property.
All in all, both loan options are equally valid and will prove to be perfect for someone's needs. It just depends on what your particular financial situation is and what benefits you more. If you need more help, check out Lenders Compared for a thorough comparison of small cash loans and lending companies.
| The Loan Checklist | |
|---|---|
| How much do you need to borrow? | The amount of money you need will make it immediately clear what kind of loan is better for you – if you only want a small amount, then a doorstep loan is excellent, but if you're looking to make a bigger purchase, you might consider an unsecured loan. |
| How quickly do you need the money? | Do you need the money urgently? While both types of loans will give you quick access to the money, a home credit loan can get the money to you on the same day. You can also look into unsecured same day loans. |
| Are you able to leave the house? | If you can go around looking for the best deal and the best loan, you can take a look at some unsecured loan options, but if not, the convenience of a loan at your doorstep is perfect for you. |
| What is your credit score like? | A poor credit score won’t get you very far with an unsecured loan, but you can get home credit loans for bad credit, as long as you’re not pursuing a high amount. |
| Do you have time to sign paperwork? | Certain loans require a lot of back-and-forth and lengthy application processes where you sign a lot of paperwork, so if that’s not something you can do, the quick and painless online application process of a home credit loan company might seem attractive to you. |