Doorstep loans are basically the short-term home credit loans which are delivered right at your door! These are the loans for those who want to draw small amount up to £1000 for a very short period of time. Generally a friendly local agent visits you for each communication regarding the loan. He typically hands over the cash and recollects the instalments from the borrower’s home.
When your personal situation does not allow you to visit the financial companies, you may consider opting for doorstep loans. However the convenience of doorstep credit comes at a cost. This is an expensive credit option, but at any given day it is better than drawing instant cash advance like payday loan.
Both doorstep loans and payday loans are instant cash advance loans. While payday loans call for direct account transfer, the doorstep loans have an agent as a mediator who hands over cash. Both are swiftly processed credit solutions.
However doorstep loans are instalment loans and this adds to convenience of repayment. The agent collects the weekly instalments according to the agreement. While in the payday loans, you are required to repay the entire amount within a few weeks or your next payday.
The doorstep or home credit loan can be advanced for a few weeks to a few months as an instalment loan.
Looking at the nature of both the loans, payday loans are ideal when despite your regular income an unprecedented expense emerges and you need immediate cash disbursement.
The home credit however can be raised as an unemployed loan or a bad credit loan to manage bad shape of your finances. The eligibility for these loans is not strictly based on your credit history. You can rely on them during the cash strapped days.
When you apply, it is essential that you make a deal with a legitimate lender who is registered by the Financial Conduct Authority, a financial watchdog in the UK. It is important to check the credentials of a loan company so that you do not end up entering a debt trap.
You may choose to make a deal with the help of a loan broker. With a registered broker, you are expected to be introduced to a registered lender only.
When you apply for a doorstep credit, a financial agent would visit you. He would discuss your credit history and would query about your requirements. While discussing your credit needs, it is important that you make minimal credit request. A debt is a debt and you should raise only for the amount that you could repay comfortably.
A failure in repayment could attract a hefty fee and thus you should ensure that you close the account successfully. By repaying the loan you would raise your credit score and credit worth at the same time. It is thus important to draft a repayment plan before advancing any credit.
Not to mention, the best advice to deal with broken finances is to save as much as possible. You need to put a hard check on your expenses. Make a budget and note down each expenditure. You may choose to delay all the expenses till you improve your credit health.