Similar to Payday Loans, Doorstep loans are very short term loans and usually the amount lent is not big. These loans are designed to help people with their short term cash requirements. As the name suggests, the loan money is delivered at the doorstep of the borrower and then the repayment installments are collected from the home of the borrower by the agents of the lender. It is because of this convenience that the loans are referred to as home collection loans.
Unlike other loans the procedure with a Doorstep loan is fairly straight forward. A borrower does not have to visit the lender personally and submit a number of forms including the faxing of bank statements to get the loan approved, as all formalities can be distinguished at the comfort of the borrower’s home, it’s more simplistic and with less hassle!
Doorstep lenders have their websites where they have put up an application form. The applicants need to fill up the application with some basic information related to the loan requirements as well as residence address and other information. Once the lender receives the application, it sends a learned agent to the residence address of the applicant. The agent then discusses the loan repayment terms and other features like rate of interest and other aspects of the loan and hands over the cash to the borrower if everything is acceptable. Every week on the repayment date, the agent will revisit the borrower at home and collect the installments.
These are small loans that are designed to meet sudden financial crunches. The amount lent by the lenders can vary but generally ranges from £50 to £750.
Doorstep loans do not have any usage restrictions. The money can be used by the borrower for any purpose. It can be used to pay grocery bills, utility bills, medical bills, car repair bills etc. It can also be used for covering small scale home improvement expenses, college fees, party expenses and travel expenses. The borrower’s expenses are never tracked by the lenders. However, doorstep lenders do suggest that the money be used only for legitimate causes and not for something that is not necessary.
Doorstep loans are unsecured loans and hence, there is no defined cap for the interest rate. The doorstep lenders are free to charge whatever they want. The good thing is that there are many lenders in market competing against each other to acquire new clients. It is because of this, the interest rates stay competitive. A potential borrower needs to look for the best rates before applying for a doorstep loan. However, it must be remembered that because the door to door loans are unsecured loans, the interest rates will be higher than the interest rates for any secured loan.
These type of loans are meant for providing financial aid to those who are in need of urgent cash to cover some unavoidable expenses. This means that anyone can apply for doorstep loans. However, the applicant must be a UK resident, adult (at least 18 years old) and have a permanent source of income.
The repayment period of the door to door loans generally range between 1 day and 30 days, i.e. 4 weeks. A representative from the lender will visit the borrower at his or her home every week for collection. However, if a borrower faces some financial trouble and think that he or she may not be able to repay the loan as per schedule, the same must be reported to the lender before the next repayment date. The representative will then visit the borrower and rework the repayment schedule with more realistic repayment goals that can be easily achieved. However, failure to inform the lender ahead of time will invite late payment charges.
There are many lenders offering doorstep loans. Even some regular banks offer these loans. However, the easiest way to find a lender is to browse the internet and use popular search engines like Google, Bing or Yahoo! to get the list of doorstep lenders in a given area.