{"id":107533,"date":"2018-05-14T12:43:32","date_gmt":"2018-05-14T11:43:32","guid":{"rendered":"https:\/\/www.finder.com\/uk\/?page_id=107533"},"modified":"2025-04-24T02:03:07","modified_gmt":"2025-04-24T01:03:07","slug":"doorstep-loans","status":"publish","type":"post","link":"https:\/\/www.finder.com\/uk\/personal-loans\/doorstep-loans","title":{"rendered":"Doorstep loans"},"content":{"rendered":"
Late repayments can cause you serious money problems. See our debt help<\/a> guides.<\/div><\/article>

Doorstep loans have a poor reputation. So what are they? How do they work? What are their pros and cons? And perhaps more importantly \u2013 if they’re best avoided, what are the alternatives? <\/p>

What is a doorstep loan?<\/h3>

A doorstep loan is a short term, unsecured personal loan where each transaction \u2013 from application, through issuing of funds to loan repayment \u2013 takes place on your doorstep. To be clear, “on your doorstep” means right at the door of your residence, not in a nearby high street or just up the road.<\/p>

How do they work?<\/h3>

Most doorstep loan companies let borrowers begin the application process online, but will want to meet face-to-face before \u2013 or at least at the point of \u2013 issuing funds. Loans are typically for amounts between \u00a3200 and \u00a31,000 (but don’t expect to be approved for a \u00a31,000 loan the first time you use a company), take a few days to be issued and are normally repaid in weekly instalments. <\/p>

Typically, the interest rates for these loans are set at a fixed rate (providing clear knowledge of the total cost of the loan in advance), but they tend to be quite high. An agent will visit you to collect the repayments at an agreed time each week until the original sum, plus interest due, has been repaid. Home visits are often sub-contracted to self-employed agents who live in the area.<\/p>

What to look out for with doorstep loans<\/h3>

Crucially, doorstep loans haven’t been reined in by the financial watchdog, the Financial Conduct Authority (FCA), in the way that “payday” loans have.<\/p>

In response to widespread concerns around high-cost, short-term credit<\/a>, the FCA introduced a raft of measures to protect borrowers, such as a cap on the amount of interest that can be charged by lenders each day, and overall. For some reason however, what the FCA terms “home credit” (which covers doorstep loans) was specifically exempted from these tighter rules.<\/p>

As a result, borrowers that opt for a doorstep loan can still face eye-wateringly high interest rates and loans that can be rolled-over into new, larger loans multiple times, allowing debt to snowball.<\/p>

Do loans at home do a credit check?<\/h3>

Not all home credit lenders will perform a credit check on you when they offer you a doorstep loan, but many will still do a “hard” credit check when you apply, which will show up on your credit file. <\/p>

However, doorstep loans are one of a number of financial products that typically serve people with poor credit, and your eligibility may be more a question of what you can afford to borrow, as opposed to how good your credit score is. <\/p>

\n
\n
<\/div>\n

While doorstep loans may seem like a convenient option if you have bad credit, it’s better to check your eligibility for other types of credit before committing to a doorstep loan. <\/p>\u201d<\/p>\n