Doorstep loan, also known as a door-to-door loan or home credit, is one of the many loan products that many lending companies in the United Kingdom offer. As the name implies, the transaction mostly happens in your home or on your doorstep. You apply online, and once the lender approves your loan application, the lender’s local agent will visit you for a face-to-face discussion of the terms and conditions as well as repayment terms. Here are some of the outstanding features of a doorstep loan.
Most people resort to borrowing because they need cash immediately. Many of them are looking for a small amount to borrow and secure repayment scheme. A doorstep loan is perfect for these people. One can apply online by submitting an application form. The lending company will send its agents to discuss the terms and conditions of the loan and the repayment scheme. These agents will also assess the applicant’s capacity to pay. Once the agents have made their report, the lender would decide to approve the loan or not. In most cases, most of the applicants can get a loan. Most doorstep lenders boast of high acceptance rate since they can accommodate applicants that other lending companies have rejected.
Home Delivery and Collection
One unique feature of a doorstep loan is the home delivery of the funds. Once the lender has approved the application, the company will send an agent to deliver the loan amount to the borrower. The agent will hand-in the money personally to the borrower. The agents will also come to collect the payments on the agreed due dates, specifically weekly.
Lenders use locals to serve as agents because they know most of the people and their addresses in the neighbourhood. With this collection system, borrowers do not need to have bank accounts to avail of doorstep loan. This condition is favourable to UK residents that do not have a bank account or live in far-flung areas. The collection agents keep a record of all payments so that the borrower would know the number of mortgages that he was able to make.
Accepts Bad Credit
Unlike other short term loans that require good credit rating, doorstep lenders welcome those with bad credit history. Bad credit refers to a person whose credit history shows unpaid debts and other financial obligations. Three major credit reference bureaus collect the data so that lending and finance companies could check if their credit score could qualify them for a loan.
There are three major credit reference agencies in the UK. These are the Experian, Equifax, and TransUnion. Nevertheless, this requirement cannot apply to doorstep borrowers because this group belongs to the lowest-income group in the community. Many of them do not have bank accounts or credit cards. Other lending companies are afraid to give them a loan because they might not be able to pay their debts. However, doorstep lenders offer small amounts with a manageable repayment scheme so that even those with bad credit can quickly pay back their loan.
People on Benefits Are Welcome
You do not have to be regularly employed to qualify for a doorstep loan. Even people on government benefits are welcome to apply. However, if you think you cannot pay on a specific due date, you must let the agent know in advance so that both can decide on an alternative way of paying his loan.
No Hidden Fees
With a doorstep loan, borrowers do not have to worry about hidden fees such as late payment charges that can be 2% to 3% of the equated monthly payments.