The term Doorstep loan’ doesn’t exactly conjure up positive images when we first hear it. It makes us think of bailiffs and a whole host of other negative and frightening thoughts associated receiving a knock on our door about unpaid debts. In reality though this couldn’t be further from the truth. Doorstep loans are really just like any other loan service, the only difference is business is conducted face-to-face in the comfort of a customer’s own home. It’s also usually done alongside a pot of tea and a bag of digestive biscuits.
Let’s get the awkward question out of the way first:
Are those representing Doorstep loan companies the same as bailiffs?
Absolutely and unequivocally not. The men and women who come to your house to discuss Doorstep loans, be it to chat about the possibility of getting one or to collect money owed, are not bailiffs. They are customer service representatives.
Imagine you are sat at home and decide to give your credit card company a call to pay some outstanding balance. You’ll speak to someone at the contact centre who’ll take your payment, then discuss the future of your policy with you before wishing you well. This is exactly the same principle when discussing your Doorstep loan, the only difference is the representative is sat in your front room with you!
So what exactly is a Doorstep loan?
A Doorstep loan is the same as a traditional loan in many ways. It’s a loan that is paid over a set period of time with a set APR, the only real difference is the payments are collected by a company representative visiting your home.
The term Doorstep loan can actually be misleading in many ways, a more accurate name would be sit on the sofa with tea and biscuits loan’. The representative doesn’t just collect the money on the doorstep then leave. They usually come in for 10 minutes for a quick conversation. This of course is only if that suits the customer. But just as it is if you call a contact centre to make a payment, there is usually some extra details to discuss. Even your credit card company sends a monthly statement to recap where the loan is up to.
The loan company representative cannot turn up unannounced, every meeting needs to be an arranged appointment at the customer’s convenience. Although it also does need to take the company’s schedule and working hours into account. In our experience the Doorstep loan company is very flexible, and customers also tend to be very reasonable too. The companies also understand that many of us may work from 9-5 or other shift patterns, so they are usually happy to accommodate coming at a more convenient time for the customer, such as a weekend or evening.
Doorstep loans are rarely huge amounts of money either, they are typically a rather small amount of money when compared to more traditional borrowing techniques. Like payday loans they are generally under $1000 and are paid back over the course of several months.
What are the advantages to Doorstep loans?
There are plenty of positives about Doorstep loans, some of them are rather unique. Many customers, especially those who are elderly may struggle with mobility, meaning going to the bank or to visit the office of any other form of finance company may be a challenge for them. They may also not be fully used to the world of online credit cards and lending. For them sitting down with someone and discussing the topic of finance face-to-face may be the way they’ve always conducted such matters and they’re unlikely to want to change this habit now. And really, why should they.
Doorstep loans are also easier to obtain than regular loans, particularly for those with bad credit. They usually require no credit checks and the company providing them tend to be fairly flexible when discussing payments. Operating in the way that they do the company can deliver a more personal touch and many customers appreciate this. Other benefits include the lack of paperwork when compared to any other form of loan. As the loan is often provided by a 'cash in hand' approach and paid back that way too, a bank account isn’t needed to take advantage of such a scheme, neither is full-time employment. Although this can put some customers off and can be risky to those who struggle with debt.
As there are no restrictions on what the money is spent on this can work in a lot of customers favour. Sometimes a loan company or a bank may not approve a loan because they disagree with the reason its required. Sometimes they are right, but on other occasions the customer knows best. It may simply be a matter of red tape and this can be frustrating for a customer. There is none of this associated with Doorstop loans, although the company will still be conscientious and will always make sure the customer is doing the right thing. They also never advise the customer to borrow more than they can feasibly pay back or use the loan to pay off other debt. Where debt consolidation can actually be a sensible thing to do, a Doorstep loan is not intended for this particular use.
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What if I miss a payment?
It’s worth pointing out that a Doorstep loan also counts as an unsecured loan meaning they are not secured against your home. Therefore, if the worst happens and you struggle to pay it back on time, there will be no risk of losing your home or having your credit rating negatively affected. Usually in this situation your representative and yourselves will just come up with a new arrangement which will allow you to pay the loan back in a more manageable way.
Doorstep loans are a novel and simple way to borrow money, they are not for everyone but those who do find value in them hardly ever go back to traditional borrowing. After all sitting down for a chat with tea and biscuits is far more pleasant than waiting on hold for 40 minutes.