Doorstep Loan Companies

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Doorstep Loan Companies - How They Operate

Doorstep loans are a really useful way for UK residents to borrow relatively small amounts of money and pay it back over quite a long period of time. They are generally a lot more affordable than a payday loan and much easier to get than a normal personal loan. While payday loans can be a great way to get money when you have a poor credit rating, the downside is that you cannot borrow very much, and you always have to pay it back almost immediately.

Doorstep loan companies lend money in a similar way to providers of personal loans, but they tend to be much more accessible for people with bad credit or a history of court judgements. The reason they are called doorstep loan companies is that they have a network of agents all over the country that collect the regular repayment amounts from the homes of everyone who has borrowed money.

Advantages of Doorstep Loan Companies

Many thousands of people in the UK use doorstep loan companies to borrow money in a way that makes it easy and affordable to pay back. Instead of having to find the full amount the next time you get paid, as with a payday loan, you can take out a substantial loan and spread the repayment over a much longer period of time, so that the small weekly payments do not upset the tight budget you have to live on.

You will have your own agent, usually from your local community, who will come to your house at an agreed time every week to collect your payments. This regularity and personal contact is what many people value most about doorstep loan companies. You can get to know and trust your agent and they are well placed to offer you sound advice about how much you can safely borrow.

The regular contact also makes it easier to keep up with payments. A lot of people who use other lenders miss payments because they just forget to deal with it. A weekly payment is much easier to afford for most people and someone calling at your home every week makes it almost impossible to forget to make your payment.

Are Doorstep Loan Companies Expensive?

The best way to check the interest rate on a loan you take out is to look at the APR (annual percentage rate). This tells you what the interest rate would be as an average across a whole year, so is a good way of comparing different companies and loans. A doorstep loan is a kind of bad credit loan, so you should normally expect the APR to be a bit higher than for a standard personal loan. There are also increased costs in terms of having to pay for a network of agents to collect money each week, which is an expense that most lenders do not have.

Any company that lends money to people with credit problems is taking a bigger risk than others, so they charge more to compensate for their increased chances of losing money. Having said that, the APR you will pay on a doorstep loan is still a lot less than that charged by any payday lender. Payday loans are meant to be paid back very quickly, but the interest rates are enormous, so if you end up having them for longer they will cost you dearly. The APR for doorstep loans will be only a fraction of that for most payday companies.

How To Find Reputable Doorstep Loan Companies

Doorstep lending is something that has gone on for a very long time in the UK, so it is possible to find very old and reputable companies to lend you money in this way. There are, however, very few that are large enough to offer good coverage with a national network of agents. There are various small scale or new lenders in this market, but it is safest to avoid these as the risks are much higher than with a reputable lender with a good track record.

You will find a recommendation for the most reliable and reputable doorstep loan company on the main Doorstep Loans page of this site.

Where To Get Doorstep Loans