These days everything seems to be more and more automated and impersonal and most financial services have gone the same way but there’s one option that’s retained its human touch and personal service – cash loans to your door in the form of the good old doorstep loan.
Doorstep loans differ from traditional loans in the fact that you’re dealing face to face with a real person, an actual human being, throughout the whole process. Better still, the transaction is completed without the need for a trip to the bank instead the lenders agent will visit you in your own home to discuss the application, explain the ins and outs of loan, sign the agreement, deliver the cash and collect the repayments.
Before we go on it’s important to remember that you should always seek advice before you enter into agreement – whilst the lending criteria may be flexible making these loans seem very attractive they most definitely will not be right for every situation and they can be incredibly expensive.
These are old fashioned type cash loans that have been around for many years. The door to door lending principle hasn’t really changed but they have been modernised and regulated for the lenders safety. These loans to your door go under several different names, you may also know them as doorstep loans, home credit or home collected loans amongst others, here’s how they generally work …
The Initial Application: This stage often incorporates modern technology as the first stage usually means a short, simple application form online although it can also often be done over the phone and will result in an “in principle” decision and with a very open lending criteria which includes those with bad credit, CCJs or previous credit problems, those working part time, retired, students or even on benefits the acceptance rate is incredibly high.
The Agreement: After the initial application a lenders representative will make contact and arrange a convenient home visit. These agents are often people who know and understand the local community. They are usually not incentivised on how many loans they sell or sign up but on how much they collect – it’s therefore vital that they consider the loan to be affordable and a decision on whether to lend or not will be based on just that, the ability to repay moving forwards and they will not judge on what may or may not have happened in the past. During this stage the loan will be explained, interest quoted and all questions will be answered to ensure that all aspects of the agreement are understood. If everything is OK the agreement will then be signed.
The Loan: Very often the same local agent will deliver the loans to your door – often in cash but sometimes on a pre-paid debit card or even in the form of shopping vouchers.
The Repayments: The term of the loan can be set to suit the lender and repayments spread over a period of up to a year (generally but lenders may vary). They are split into weekly sums which therefore are kept very small and collected by the same agent from your doorstep each week. This makes the doorstep loan incredibly affordable and reduces the risk to the lender and is why the approval criteria is so wide.
As we mentioned earlier, these doorstep loans are available to a wide range of people – those who own a home, those who rent and those living with friends or family, older generations or young, working full time, part time or retired, students or those in full time education, – even the unemployed or those on benefits can be considered.
As for adverse credit rating or bad credit history – no problem – applications will be considered and a decision will not be based on what went wrong in the past so arrears, defaults, CCJs etc need not stand in the way. This flexible criteria makes the doorstep loan a really popular UK credit option.
The home collected loan is a form of personal finance and as such can be used for any reason at all – home improvements, help with Christmas, everyday expenses, holidays, travel, general repairs … you will often not even be asked the reason for wanting to borrow.
You will not be able to borrow huge sums of money though – current maximum loans are being advertised often as £500 but more lenders seem to increasing this to £1000 or so.
Beware though as interest rates are usually higher than other types of loans reflecting the short term nature of the loan and the increased risk to the lender due to the flexible approval criteria. It is possible to compare local home collected loans at http://www.lenderscompared.org.uk – this is an official, free to use, independent price comparison website for loans to your door available in your area.
As far as security goes you must ALWAYS check the credentials of the agent and lender – make sure they are licensed by the Office of Fair Trading (OFT). In the UK anyone lending money should have a consumer credit licence from the OFT. Licensed lenders have to comply with legal obligations in 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.
Doorstep loans, home collected loans, home credit, call them what you will but personal finance doesn’t come any more straightforward than these cash loans to your door.