Are you wondering what doorstep loans are? Could this be a way to help you with your financial struggles? This is a different type of loan that means your extra cash comes to you. It may be an option for small amounts of cash and if you do not have a bank account. But there are some downsides to this type of loan. Let’s take a closer look.
What are Doorstep Loans?
First of all, it is important to know what this type of loan is. This is a loan that can also be referred to as home collection loans and they involve cash loans being delivered to the front door of your house. You begin the whole process like any other loan. You complete an online application and if you are approved, a representative will visit your home. Alternatively, you may be able to discuss your situation with an authorised representative depending on the loan company.
Despite the idea of receiving cash loans to your door, it is not a requirement for you to own your home. All living circumstances can be considered by lenders, including those in council housing and housing association properties. Door step loans do tend to be for smaller amounts of money. They are are a type of unsecured loan, which means they do not attach to your home or risk repossession if you default on a payment. You can also make repayments on a weekly or fortnightly basis.
The Advantages of Doorstep Loans
One of the main reasons that people like the idea of doorstep loans is that they are quick and easy. You do not have to receive money to your bank account. Instead, a lender representative comes to your home with the cash in their hand. This convenience attracts a lot of customers and some people prefer to deal with transactions face-to-face.
Doorstep loans can be a way to deal with difficult financial situations. For example, if you have sudden repairs in your home or have to buy a new appliance, a doorstep loan can be a way to do this. You can make repayments in a way that suits your financial circumstances.
Doorstep loans are carried out professionally. An authorised representative will visit your home and they will explain everything to you. This includes carrying ID so that you can know everything is professional and legitimate. In addition, there are often no hidden charges or penalties for late payments. Of course, this will depend on the company. But often, local doorstep loan companies will try to accommodate customers.
The Disadvantages of Doorstep Loans
One of the main advantages that you can expect from provident loans is that they normally have a high interest rate. This means that you have to budget for the repayable installments every month, as well as for the interest. This is going to increase the overall cost of your door loans, which might mean it is no longer an affordable option for you.
You may also prefer to receive money directly into your bank account. But the point of the loans doorstep option is that it is delivered to your home. There are going to be other personal loan options available that can offer you what you are looking for.
Important Things To Remember
Before you think about applying for a doorstep loan, make sure you consider the lender. It is best to choose a company that is local and that you know is authorised by the Financial Conduct Authority (FCA). If they are not authorised, this is going to be an illegal transaction.
Always ask for proof that they are registered with the FCA before you agree to repayments and loan benefits. Otherwise, this company can be referred to as loan sharks. These are people that illegal loan people money.
Representatives will never just turn up at your door. They need permission to make contact with you and all details are arranged prior to them visiting your home.
Do Loans at Home Do a Credit Check?
A lot of people assume that delivering a door step loan to your home means that you can avoid credit checks during the application process. However, this is untrue. Most reputable lenders will carry out a credit check when a customer submits an application for a doorstep loan. From their point of view, they want to know that you are not a high-risk customer and that you are likely to pay the money back for the doorstep loan.
Can I Get A Loan if I Have Bad Credit?
If you have bad credit, it may be harder for you to access a doorstep loan. But this does not mean you should not send in an application. While those with good credit will find it easy to access any type of loan, lenders do carry out other checks if you have bad credit. All is not lost. For example, they may complete an affordability check and see whether your employment and financial situation would enable you to handle the repayments on a doorstep loan. If they can see that you have a regular income, this can show you are able to make repayments.
Are There Any Loans for the Unemployed?
There are other loan options that may be more suitable for those that are unemployed or on benefits. Just because you do not have a regular source of income does not mean you cannot enjoy a loan. It may be more difficult but it is not impossible.
if you do not have an income, you can choose a secured loan. This means securing your property or a valuable asset against the debt. In the event you cannot pay back your loan, this property will belong to the lender and they can sell it. This offers security and less of a risk for lenders because they know they will get their money back.
High-Interest Personal Loans
There are some lenders out there that will offer you a high-interest personal loan if you are unemployed. The higher interest will ensure they are able to make up a repayment if you default on your fixed agreement. This type of loan may mean assessing affordable and looking at your credit score.
Payday loans allow you to enjoy some extra money before your next paycheque. Of course, if you are unemployed, you may not have a regular source of income. This can mean that payday loans are not the most sensible option unless you know for certain that you can pay it back in a short period of time. They can also have high interest rates that you would have to factor into your repayments.