Doorstep loans are incredibly popular due to their flexibility, the personal interaction and, in particular, because of a less formal credit check procedure making them a realistic option to those with bad credit or those who may struggle to obtain finance through the “normal” High Street channels. You may know or hear them referred to by several different names as well as a doorstep loans – bad credit cash loans, home collected credit or, just simply, home credit.
In simple terms they are described as short term cash loans that are delivered to your door and the repayments collected from your home, usually weekly, by a local agent.
A doorstep loan often comes with no official credit checks, instead the lenders prefer to focus on an affordability check to make sure the repayments are comfortable moving forwards. That means not relying on a automated, computer based approached but instead giving you the opportunity to talk face to face with a real person and in the comfort of your own home. This local agent will administer the process from start to finish – initially handling the application, discussing the loan, checking affordability, making sure it’s right and all aspects are understood, delivering the loan, collecting the repayments and checking for any unforeseen problems.
Doorstep loans are fast, flexible, affordable and available which makes them one of the most popular forms of personal borrowing around today. Cash loans to your door with a human touch … borrowing the way it used to be!
If you think this all sounds too good to be true you’d be right! The main drawback is the cost – they can be very expensive when compared to other forms of lending.
How Does A UK Doorstep Loan Work?
Let’s look at the whole process from start to finish:
Before you start you will usually need to be aged between 18 and 74, be a UK resident, agree to a credit check and agree to a home visit from an agent. You may not even need to have a bank account.
Shop around for a local lender or national lender who covers your area. At this stage it’s absolutely vital that you go for a licenced lender only. All reputable home credit providers are required to be registered by the Financial Conduct Authority and hold a consumer credit license. You should check this on the official FCA website: http://www.fca.org.uk/ .
Licensed lenders also have to comply with legal obligations for dealing with customers, including the use of proper paperwork and fair collection methods so always choose your doorstep lender carefully and ensure they comply to these legal requirements.
If you so much as suspect that a lender is not all they claim to be DON’T deal with them.
Once you’ve decided on a company (or companies) you will usually be required to complete an application online or over the telephone. There will be personal questions to answer as they’ll need to check that you are who you say you are and live where you claim to live.
Navigate to your chosen lenders website, click the apply button and have the following information to hand:
Personal information including your National Insurance Number
Address details covering the last 3 years
Phone number and email address
Remember that proof of ID will be required and presented to the agent
This initial application will enable the lender to make an in principle decision – if you cannot satisfy the basic requirements at this stage the application will be declined.
Assuming everything is OK you will then be contacted by your local agent who will arrange to pay a visit to your home at a time convenient with you.
At this face to face meeting the agent will discuss all aspects of the loan and complete an affordability assessment to ensure that the repayments are within your means. You will then be provided with a quote which will state the cost of the loan.
Don’t just accept this first quote, instead pay a visit to Lenders Compared http://www.lenderscompared.org.uk. This website is an official website that’s free to use and acts as a completely independent price comparison website for home credit and bad credit doorstep loans. It will give you peace of mind that your loan is quoted at competitive rates.
You will have to chance to decide ow much to borrow (usually from £100 and up to £1,000) and over what term (typically up to 1 year or 52 weeks). The size and term will affect the cost of borrowing. With a home collected loan YOU are in control – the amount you borrow is down to you and the repayment terms can also be tailored to suit you. They can be set over a few weeks or up to a maximum of a year or so making the repayment both small and manageable.
Only when you are completely happy about the lender, the loan and the terms and conditions should you then sign on the dotted line – again, via your agent.
It’s absolutely vital that if your circumstances change or you get into difficulty that you let your agent know right away … they can help you.
It’s as easy as that … some say it’s too easy and too available and perhaps it is.
You may be able to get doorstep loans with bad credit, if you’re unemployed, a student, retired or working part time. They are personal loans so what you spend the money on is up to you and they are not secured so you don’t need to own a house to be eligible. Bad credit, no credit history, arrears and even CCJs are also OK.
Whilst there are many other forms of lending available there are very few that offer the flexibility and convenience of doorstep loans – any purpose cash loans that are delivered to your door and repayments collected in the same way over a term to suit you and all that plus an incredibly flexible lending criteria.
All this does make them incredibly available and tempting so we suggest that you really do think long and hard before committing to a doorstep loan. Do you really need the money, do you really need to borrow and is there another way.
Why Are They Called Doorstep Loans?
Simple really – because the whole process, from application to repayment, is handled in your own home. Hence why they’re also known as home credit, home collected credit, door to door loans or loans to your door.
Doorstep Cash Loans To Your Door For Unemployed People On Benefits – Really?
Often a question asked … are doorstep loans available to those who are unemployed or people on benefits and the answer is that many lenders WILL consider this as long as the affordability assessment stacks up. We would like to reiterate our warning though – doorstep cash loans to your door for unemployed people or those on benefits may provide a quick fix but will often result in a serious long term problem. You really must think very carefully, look at other options and seek professional advice before you make any form of commitment … there may well be a much better way.
Doorstep Loans No Credit Checks ?
A credit check will usually be carried out but mainly to check you are who you say you are. A decision as to whether to lend or not will be made as a result of the affordability check rather than the credit check. In other words a decision to lend will be made on the ability to repay moving forward rather than on anything that may have happened in the past.
How Much Can I Borrow?
Every lender is different but typically from as little as £100 and up to a maximum of £1,000
Doorstep Loans Weekly Repayments?
Usually you will be able to split the repayments into small, manageable amounts which will be collected, in person, on a weekly basis ove a term to suit you but typically up to a maximum of 52 weeks.
Are Doorstep Lenders Loan Sharks?
Remember, there will be plenty of genuine, reputable lenders who will consider borrowing you money even if you’re on low income, have a bad credit rating, or only need the cash short term. Every home credit doorstep lender in the UK has to be authorised by the Financial Conduct Authority (FCA) – you should always check the credentials of any company you are considering borrowing from with this organisation.
An unauthorised lender is called a loan shark. These are unauthorised lenders who operate outside of the law. They therefore are associated with providing loans on bad terms, pay extremely high rates of interest, pressure and harass if you get behind with repayments and pressure you into more and more borrowing.
If you find yourself in the position that you are under no legal obligation to repay the debt but you should contact the Trading Standards Office immediately on 0300 123 6262 or visit the Government website http://www.nidirect.gov.uk/dealing-with-loan-sharks
Whilst some lenders will consider your doorstep loans application even if you’re not working if you are specifically looking for a cash loan and you’re unemployed we strongly urge you to think carefully about this, seek advice and ask yourself if there is a better solution. Read our article on Loans For The Unemployed >>> and visit the Money Advice Service website who have an excellent section on exactly this issue.
Consider the recent facts – some 1.3 million people use doorstep loans with the average loan being around £500. in 2016 Citizens Advice alone were approached for help by over 23,000 people whose doorstep loan debt had become completely unmanageable. Their average debt had risen to over £700 and many had taken out multiple doorstep loans.
The words of Citizens Advice Chief Executive Gillian Guy:
“Some doorstep lenders are putting people at risk of escalating debts with their irresponsible actions. The personal nature of doorstep loan selling and debt collection can put customers in a vulnerable position. Our evidence shows some lenders are taking advantage of that relationship and causing serious harm to borrowers by turning up unannounced or putting clients under pressure to repay or take on more debt.
It’s important there is strong regulation of high cost credit markets to make sure companies put the needs and interests of consumers at the heart of their services. The FCA’s intervention drastically reduced problems in the payday loan market – we now want to see similar protections introduced for consumers using other high cost credit products, including doorstep loans.”
What Are The Alternatives?
A more cost effective alternative could be borrowing from a credit union (worth checking out) OR not to borrow at all. Perhaps a family member or friend can help out, perhaps you can sell unwanted possessions or do a car boot sale … there could just be a better way!
Need your cash a little quicker – then check out our urgent bad credit loans or, for larger amounts, our selection of bad credit unsecured loans.
Also included in this section are alternative, similar, instalment loans – small cash loans that, like doorstep loans, can be paid off in weekly or regular instalments but without the personal, door to door service.
Of course, the best alternative would be not to borrow at all. So please consider this and think if there is another way … borrowing from family or friends, selling unwanted possessions or saving up.
Listed below you will find plenty of other related articles detailing the specifics of doorstep loans in the UK – we hope you find them useful and informative.