A doorstep loan is an old-fashioned way of lending and borrowing money. It is ideal for people that have a low credit score, do not have a bank account or those that prefer face-to-face borrowing. You can apply for this loan online, but the release of funds and collection is always face-to-face. A team of collectors would come to your house to hand you the funds and to collect payments regularly, usually weekly. One can borrow £100 to £2500, and you can pay this for 14 to 52 weeks. Despite the face-to-face transaction, approval of the loan and release of funds is quick and easy. Here are some reasons why some people prefer to take doorstep loans.
You Do Not Need Good Credit
A doorstep loan is one alternative for people with bad credit or no credit at all to borrow money for their urgent needs. Many people cannot take a loan because they cannot meet the credit rating requirements of many traditional lenders. With a doorstep loan, people with bad credit can apply for a loan and qualify quickly and easily. A credit agent comes to discuss the terms and conditions of the mortgage at the borrower’s home. If the borrower is amenable to the terms and conditions, the agent releases the funds on the spot.
You Do Not Need a Bank Account
Most online lenders release funds and collect payments through the bank account of borrowers. However, nearly two million UK residents do not have a bank account, and these people would find taking a loan from online loan companies almost impossible. With a doorstep loan, it does not matter if you do not have a bank account because the lender delivers the cash to your home and a collecting agent visits regularly during your payment schedule. If you do not have a bank account, do not think that you could never apply for a loan anymore. Several doorstep lenders welcome applicants and approve most applications.
A doorstep loan is ideal for people that cannot quickly leave their home for some reasons as well as to those living far from banking facilities. Borrowers can receive their funds at home and make their payments at home. Borrowers would be reluctant not to pay when the collector visits them.
Most doorstep lenders create a ledger where they record the payments. Borrowers would be able to track their loans without using the internet to check their loan balances. Because borrowers also have a ledger showing how much to pay during the visits, they would be able to program their expenses so that they can set aside the amount that they need to repay the loan.
You Get Reasonable Interest Rates
Another feature of a doorstep loan is the reasonable interest rates. While some people compare doorstep lenders to loan sharks, there is a big difference between the two. Doorstep lenders are legitimate because the Office of Fair Trading regulates how doorstep lending companies conduct business such as interest rates and penalties. These companies cannot implement an annual percentage rate that is beyond what the Office of Fair Trade recommends. On the contrary, loan sharks are illegal because no agency oversees their activities. Aside from exorbitant interest rates, loan sharks would mete out physical punishment, making this type of loan quite dangerous.
For people who have limited options when it comes to taking a loan, a doorstep loan is a good alternative. Aside from being registered with the Office of the Fair Trade, it comes with a reasonable interest rate. If you have a bad credit record or have no bank account, doorstep lenders could still help you find solutions for your emergency needs.