Doorstep loans are as the name suggests, cash loans which are delivered direct to you at home. These loans are often marketed to people who would not be able to get loans from other sources, such as those with low incomes, on benefits or with bad credit. Be very careful when accepting doorstep loans as they can be a very expensive form of borrowing.
How Doorstep Loans Work
Doorstep loan companies employ agents who issue loans and collect payments. Payments are collected weekly directly from you at home, and the loan is also paid direct to you in cash. Doorstep loans are usually repayable over 20 weeks to 52 weeks and you pay back a fixed amount each week. The amount you repay will depend on how much you borrow and over the length of time you wish to repay the loan over. You can choose a repayment to suit your budget. Because your weekly repayments are fixed over the term of the loan you will always know you much you have to pay and how much you have already paid.
What To Consider When Taking a Doorstep Loan
Doorstep loans are a very expensive form of loan, but unfortunately they are still the most available form of credit to those on low incomes, benefits or unemployed. Because they are repaid in weekly installments, the total cost of the credit is often ignored in favour of convenience. Doorstep loan agents are also put under tremendous pressure to sell loans, including further loans which are tacked onto the first. Before thinking of a doorstep loan, consider if there are alternative forms of credit such as a local community credit union or another way of funding what you need such as a loan from a relative or friend. Doorstep lenders offer fixed weekly payments which means your repayments may never go up but many will not offer a discount for early repayment either.
Ensure The Doorstep Lender is licensed.
Unlicensed doorstep lenders are loan sharks, so check a lender is fully licensed before considering entering into an agreement with them. Loan sharks are very unscrupulous and people have got into serious financial problems due to spiralling interest and out of control repayments.
Before Accepting A Doorstep Loan:
Consider whether you could get the money elsewhere ie borrow from a friend or family member or a credit union.
Ensure that the lender is properly licensed to lend money
Make sure that you know exactly how much the loan is going to cost and how much you will be paying back each week and for how long. Most doorstep lenders don't make extra charges if you miss a payment but they don't give you a discount for early repayment either.
If you do accept a loan, ensure you read the paperwork thoroughly and understand your rights. You have 5 days from the day you sign the paperwork to cancel the loan if you not longer want it.
Ensure the agent leaves a payment book or card and that this is filled in every time you make a payment. As most doorstep loans are repaid in cash rather than by direct debit or card it is very important that you get receipt for every single payment in case of dispute later on.
Morses Club Doorstep Loans (Shopacheck)
Morses Club offer cash loans delivered to the door repayable in weekly installments. New customers can borrow up to £200 and existing customer can borrow up to £1000. Loans are repayable over either 34 weeks (466.4% APR) or 50 weeks (254.5% APR).
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