A doorstep loan is not a loan. It is rather a service. All instant loans provided on your doorstep are called doorstep loans. doorstep service is not a new, and not all lenders provide this service. A few online lenders furnish some people with this facility to speed up the processing. Doorstep loans are not very popular now because the most reputed company The Provident has shut down its operations. Now one or two lenders provide these loans. You will have to research them before applying for these loans.
There is no doubt that doorstep loans are expensive. They charge higher fees than urgent cash loans because representatives of lenders visit your home to hand you in money. The collection is also made on your doorstep. Therefore, lenders charge extra fees. Additional fees will accumulate the cost of doorstep loans.
Why choose doorstep loans?
Here are some reasons why you should choose doorstep loans:
· Instant approval
One of the benefits of home credit loans is that they come with instant approval. As soon as you submit a loan application form, your lender will arrange a meeting with their representative, who will visit your house. The date and time will be chosen by you. A lender representative would look over your bank statement to see if you can repay the debt.
If so, money will be handed over without further ado. The representative of your lender would carefully peruse your repaying capacity. you must meet the eligibility criteria to receive approbation. If your income is not enough to discharge the debt in fell one swoop, they will repudiate your application or reduce the loan amount.
If you prove your repaying capacity, money will be instantly handed to you. You can use that money the way you want. Lenders do not impose restrictions on the usage of loans.
· No credit checks
When you apply for a loan, lenders run hard credit checks. A hard credit check leaves search footprints on your credit report. Each credit inquiry pulls at least 5 credit points. Multiple credit inquiries sharply reduce your credit score. It means you will not be able to qualify for a loan at affordable interest rates. Therefore, no credit checks come into play.
A no credit check means neither hard nor soft credit checks are run. Lenders make the decision based on your income sources. If you can repay doorstep loans on time, you will get approval. The loan amount is so small, usually not more than £1,000. Doorstep lenders might approve your application without any credit checks. Your credit score will remain unchanged if no hard inquiries are made.
· No hidden fees
Another reason why you should apply for doorstep loans is that they charge no hidden fees. when you submit the application form, the representative of a lender would arrange the meeting with you on the date chosen by you.
The representative would carefully examine your income sources and then give you a bifurcation of the loan cost. You will understand the fees and interest you have to pay on top of the principal. Everything is transparent between you and your lender. You would know how much money you have to pay in total.
· No restrictions on the use of loans
Doorstep loans are small emergency loans. You can take them out for any purpose. Whether your car is broken down or your refrigerator is acting up, you can use these loans for any purpose. Lenders do not ask how you are about to use these loans. You can use doorstep loans with no credit checks to meet planned expenses like weddings if your savings have fallen short of cash. While personal loans are strictly to be used for a specific reason, doorstep loans can be used for any reason.
Lenders would not ask you the reason for borrowing money, and if they do, they would never ask you how you are about to use the money. You can use doorstep loans for weddings, vacations, and business. Lenders do not impose restrictions on the usage of these loans. However, they will not let you use personal loans for business purposes, for example.
· No collateral is needed
Even if your credit score is not stellar, you can easily qualify for the loan. When the loan amount is big, you might have to submit collateral. However, the good part about doorstep loans is that you do not need to arrange collateral.
The amount of collateral is generally higher than the cost of the debt in the case of personal loans, so lenders can cover their money back in case you make a default. However, with doorstep loans, you do not have to be worried about it as the loan amount is so small.
· No guarantor is needed
Similarly, if you have to borrow a large amount of money, lenders often require you to arrange a guarantor with a good credit history. This reduces their risk because they can call on the guarantor in case they fail to discharge their debt. ideally, it is your responsibility to tackle the dues, and therefore lenders will not turn to the guarantor unless all means of recovering money from you get exhausted.
But if you have to apply for a doorstep loan, you do not have to worry about arranging a guarantor. Since doorstep loans are aimed at meeting small emergencies, lenders would not want you to go through such formalities. The approval process for doorstep loans is simple and easy.
Even if your credit rating is not stellar, they will not ask you to arrange a guarantor. However, the borrowing amount is small, which is also one of the reasons why they do not seek any guarantor. Arranging a guarantor might take a long time because most people refuse to act as a guarantor, and they do so because they know their credit score will also be affected if they fail to discharge their debts.e to act as a guarantor, and they do so because they know their credit score will also be affected if they fail to discharge their debts.
Are there any alternatives to doorstep loans?
Yes, there are some alternatives to doorstep loans, such as:
- Instant loans
- Payday loans
- Text loans
- Small personal loans
As you know, doorstep is a service, and all the above loans are called doorstep loans when you use a doorstep service. In order to save some of your money, you should try to avoid using a doorstep service. Have a functional bank account. Make sure that the lender transfers money to your account and withdraws money from it as and when the payment is due.
The bottom line
Doorstep loans are quite popular because their approval is quite easy. You really do not have to worry about arranging collateral and guarantor. These loans are aimed at meeting small emergencies, so they do not have to be complicated.
You should always try to consider other alternatives because doorstep service would cost you a lot of money. Compare the total cost and then choose an ideal loan for you.
