Finding yourself in need of cash to pay an overdue utility bill, urgent car repair, or medical bills can put you in a bad situation. Borrowing money from relatives and friends can help, but when these people are financially struggling like you, they might not be able to help. Why not apply for a doorstep loan? Many UK residents from the weak sector turn to this type of lending during difficult times. Since it is a loan, the lender charges interest. Nevertheless, doorstep loan continues to be popular among those who are in dire need.
Here are some essential things that you should know about a doorstep loan in the UK:
- Doorstep Loan Defined
A doorstep loan is a type of short term borrowing where local agents personally bring you the funds and collect a weekly or biweekly payment for the loan. Some people call this type of loan home credit because all borrowers receive funds at their homes and make payments through collectors that visit their house to collect your dues.
Doorstep lenders have the authority of the Financial Conduct Authority (FCA) to operate as a lending entity. To make sure that you are borrowing from a legitimate lender, always ask for the authorisation or check the inclusion of the company name at the FCA website.
- Target Borrowers of Doorstep Loan
Doorstep loan may have a high-interest rate as it targets people that have a poor credit history, have meagre income, and those that do not have a bank account. Most lending companies release the funds through the borrower’s bank account. If you do not use the services of a bank, you can’t take a loan because there is no way of releasing the amount that you borrow.
Since doorstep loan or home credit brings the cash to you directly and collects payments from your house, opening a bank account to take the loan is unnecessary. You do not have to take a trip to the bank, allowing you to save time, gas, or fare.
- Doorstep Loan Is Convenient
What makes doorstep loan highly accessible is the convenient way of taking a loan. Some lenders allow borrowers to submit their application online. After reviewing the application form, the company sends a representative to the borrower’s home address to explain the details to you. The agents would answer your questions regarding the loan and how you must pay it back. Once you have clarified everything, the agents would give you the funds. The agents would visit you during the payment date to collect your payment.
- Available to Those with Poor Credit
A doorstep lender does not consider your credit score or credit rating only when deciding to lend you money or not. They have several criteria as to who can borrow or not, and even with a poor credit rating, you might still qualify for a loan. Since the clients are from poor neighbourhoods, many of them would have poor credit or no credit at all, which disqualifies them from taking loans that require a good credit rating.
- Quick Release of Loan
One downside of taking a bank loan is the delay in the approval and release of funds. The lender would check your application first to make sure that you have met all the requirements. Transferring the funds could be a problem if you do not have an existing bank account. If you have doubts regarding the means of sending funds to you, a doorstep loan is the best way to go because the agents of the lending company bring the cash to your home.
For your emergency needs, a doorstep loan is the best answer. Application and approval are quick, and you can get the funds and pay your debt straight to the agents that come to your doorstep.