Hello and welcome to Solution Loans. This
short video covers a guide to doorstep loans. Doorstep lending or home credit is one of
the oldest forms of consumer credit in the UK and is based upon personal contact between
the borrower and one of the lender’s agents. Like other forms of lending it is fully regulated
by the FCA. There are a number of companies that operate doorstep lending – some national
and some others regional or local. The basic premise is that if someone applies for a doorstep
loan the lender’s agent will visit them to assess their application. They’ll want to
know more about their personal circumstances and will aim to come up with a tailored finance
package to suit their needs. In most cases, potential borrowers do not have to have perfect
credit records and may have been declined loans by High Street lenders. Some people
prefer the personal contact that doorstep lending brings for a variety of reasons. For
instance a person may lack mobility or they may find visits to banks or dealing with other
financial companies rather intimidating. There are millions of people in the UK who have used
or are using doorstep lending as a way to help manage their finances and bridge shortfalls
in income. So how exactly do doorstep loans work? The most progressive lenders use online
services to make borrowers aware of their services and to gather loan enquiries. Be
aware that there are still some doorstep loan firms who use unsolicited methods to generate
business normally by cold calling potential customers at their home. It is always best
to avoid these types of lenders. It is preferable to make online enquiries which are instantly
then assessed by the lender. When the lender believes that it can, in principle, assist
the applicant then it will make contact to arrange for one of its agents to visit their
home. The home visit involves a more detailed assessment of the client’s income and outgoings
to assess the affordability of a loan repayment. If the agent believes the applicant can afford
the loan then they will make a loan offer. The applicant and agent then agree the terms
and the cash is often handed over there and then. Unlike other smaller loans, home credit
usually involves repayment schedules that stretch from 14 weeks all the way up to a
year. The repayments are fixed so that you can plan your finances and an agent will visit
your home every week to collect them. In many cases, there are no late payment fees and
the repayments are generally small and manageable. So why would someone take out a doorstep loan?
Mainstream credit and online processes are not for everyone. Many people prefer a personal
touch and don’t want to have to visit a bank or spend time filling in forms online
which can be both confusing and intimidating. Doorstep lending agents are skilled at assessing
a client’s needs and financial circumstances and provide a helping hand through the process.
They are usually able to hand over the loan to the applicant once he or she has been approved.
This usually happens immediately. Doorstep loans are generally for sums between £100
and £1,000 with longer repayment schedules than other small loans including payday credit.
Doorstep lending firms regularly report high levels of customer satisfaction and some of
them are among the oldest consumer finance companies in the UK with more than a century
of trading. So what are considered the downsides? Although doorstep loans are usually made for
relatively small sums, they do come with very high interest rates when compared with other
forms of lending. It is not untypical for a doorstep loan to have an APR as high as
500%. If you need a smaller sum, say £200, for instance, and have a credit card, then
you would pay much less in charges and interest borrowing on that even if it has a relatively
high APR. However, if you can get a credit card then you probably don’t need to resort
to a doorstep loan. If you are facing financial difficulties and are struggling to manage
day to day, a doorstep lender may seem like an attractive option. However the golden rule
as with any form of credit is to only apply for what you can afford to repay. If you are
struggling to repay bills, you should seek debt advice rather than adding to your financial
burden. Any form of borrowing could add to your problems rather than solve them. So to
conclude doorstep lending is a well-established form of consumer finance that has been operating
for more than a century and has very high customer satisfaction levels. The service
that an applicant receives is much more personal than with other forms of lending and the complete
package is far from old fashioned as it involves an online enquiry that ensures the response
is quick. Many people prefer the visit from an agent that comes with doorstep lending
and like the longer repayment schedules that they offer. The interest rates that you pay
are significant higher than those for traditional loans. However there tend to be no hidden
costs or charges even if you miss the odd repayment.

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