Practical tips to help you improve your credit rating and avoid expensive high interest loans
If you’ve been looking for a cash loan you might have come across the term door to door loans and been confused about what these are. Let us explain.
Door to door, also known as doorstep or home credit, loans are small cash loans delivered to your door by a local company representative who will collect your repayments on a weekly basis until the debt is repaid.
This type of borrowing is particularly suitable for people with mortgage arrears, CCJs or a bad credit history who may have been refused other types of loans in the past.
They are not meant to be a long-term solution to financial problems and the APR is representative of the fact that they should be paid back as quickly as possible.
Find out more about CCJs and their impact by clicking here.
If it is your first loan with the company there are usually restrictions about how much you will be allowed to borrow. For most companies, this is around £100. Once you have demonstrated that you can afford the repayments and that they are always on time you will be able to arrange additional finance if necessary.
After you have applied for the loan, and as long as there are no problems with the application, it will be agreed in principle and you will be contacted by a local representative or agent who will come to your home to go through the terms in more detail. You will need to produce proof of your identity and address at this meeting.
As long as the agent is happy that the loan is affordable and everything has been compiled correctly they will approve the loan. The money is usually available within around 24 hours and will be delivered in cash.
If you are a little unsure about which forms of ID can be used as proof of your identity, the UK Government has drawn up a Proof of identity checklist
As all repayments are also collected in cash there is no need for you to have a bank account in order to take out a door to door loan. Your designated agent will visit at a weekly pre-arranged time to collect your payment and will log all transactions in a record book. This will enable you to see exactly how much you owe throughout the term of the loan.
All applications and transactions are dealt with in the strictest confidence so there is no need for anyone else to know about your loan if you wish for it to remain private.
There are no hidden fees and overpayments and early repayments are accepted.
For more on the benefits offered by overpayments, please click here.
As long as all repayments are made on time and in full you will actually improve your credit score while you borrow. This is because the major credit agencies are advised of every transaction and this means you might be able to apply for a more conventional loan in the future.
If you think you are going to have problems with any payments it is important that you speak to your agent as early as possible. Under most circumstances, alternative arrangements can be made to ensure you are able to continue clearing the loan.
If you would like to explore alternative ways to improve your credit score, take a moment to visit the Telegraph article - 20 things you must know to boost your credit score
Whilst doorstep loans offer an option if you have a poor credit rating, there are typically lower-cost options available, see our: