May 11

Doorstep Loans

Team Antworks

Doorstep loans, also known as home credit, are unsecured loans which can be taken for smaller sums of money. The borrower can get the money delivered at their doorstep by an agent who will come to collect the repayment instalments, usually on a weekly basis. Interest for these loans is calculated on pre-set rates and the loan amount is disbursed in one or two days. These loans have minimum eligibility requirements.

Doorstep loan eligibility

Doorstep loans have very few eligibility requirements. You have to be a resident of the country you are applying in. You have to be at least 18 years old. In general, you should have a steady source of income, preferably as a salaried employee. Self-employed people can also avail doorstep loans provided they can furnish proof of their income. Some providers may also ask for a minimum income requirement before disbursing doorstep loans to you. Some providers may also go for credit checks at the time of loan processing.

Documents required for doorstep loan

There are minimal documentation requirements when applying for a doorstep loan. In general, you have to submit the following documents to the credit agency:

Photographic ID such as driving license, passport etc.
Address proof such as utility bill, mortgage statement, credit card statement, pension statement etc.
Brief proof of income such as wage slips, bank statements etc.

Doorstep loan for unemployed

There are a few companies that provide doorstep loans to unemployed people, however some companies may reject your application in such cases. This is because the loan provider does not see a viable option in disbursing loans to you as you are in a risk of defaulting for extended periods of time. You can still explain your current situation to the loan agent and they may consider your application. Doorstep loans are generally informal loans, and as unemployed people might also get their applications processed.

Doorstep loan with no credit check

The credit check process of a doorstep loan is very informal. These are amazingly flexible loans, wherein the decision to disburse a loan to you is not entirely based on your credit history. The final decision for the loan approval depends on your existing situation as well as your ability to make the regular repayments comfortably in future. As such, the lenders tend to focus on your future abilities for repaying rather than your past credit history, which can be a relief to a lot of people looking for unsecured personal loan of small amounts. At most, the loan agent will conduct a cursory evaluation of your past credit history.

Doorstep loan for bad credit

These loans are ideally suited for people with bad credit history. As discussed above, only a rudimentary check of your credit history is done by the lender. And this credit check is more of a standard procedure than a real issue when disbursing loans. The loans are provided on your ability to make regular repayments, rather than how you handled your finances or credits in the past. And being smaller loans, a credit history doesn’t make much of a difference in ascertaining your repayment capability.

Doorstep loan interest rates

The interest rates on these loans are rather high. The representative APRs are generally upwards of 100%, and in worst cases can be as high as 1,500%, which signals repaying a lot more than you actually borrowed. The repayment tenures generally range from 14 weeks to 52 weeks. APR stands for Annualized Percentage Rate, which is an indication of the overall interest you will pay to the lender in a year. However, APR does not necessarily provide an accurate description of the overall interest, as most of the doorstep loans are for smaller tenures. For instance if you repay the credit within 14 weeks, the overall interest that you paid will be lower than the APR, which is calculated if your extend the repayment tenure throughout the year.

Doorstep loan features and benefits

The major feature and benefits of doorstep loans are as follows:

Instant approval: The whole process from when you make the first telephonic enquiry to the actual disbursement of loan takes between 2-4 days, making it a very quick option.
Personal touch: The personal doorstep service add comfort to the whole process, and in most cases the same representative will be collecting the repayments every week. This increases trust on your part.
High interest: These loans generally come with a high rate of interest, so you need to be careful when applying for a doorstep loan. The amount you borrowed may not be much, but the added interest can put a hole in your pockets in the long run.
Credit history non-issue: The credit history is just skimmed over in most cases as the actual quality the lender is looking is whether you will be able to repay the credit in the near future from earnings in the future.
Trading vouchers: Some doorstep lenders may offer you trading vouchers and cheques. The vouchers can be redeemed for good, primarily soft furnishings and clothing, and at specific outlets as defined by the lender.
No penalties: Late or missed repayments do not attract additional charges. The agency representative may also help you out with technicalities so that future payments are in order.
Affordability: The loans are generally provided for low amounts, and as such repaying them should not be too much of a problem. However, the interest rates are pretty high and you can get overwhelmed by the interest if you don’t repay the whole loan in time.
Convenience: The loans are disbursed and repayments collected right from your doorstep, making the whole process hassle-free and painless.
Transparent: The loan amount, interests and repayment figures are clearly outlined before the loan is disbursed so that you don’t get blindsided by hidden charges.
Choosing lender: Be sure that your chosen lender is adequately certified by authorities. An uncertified doorstep lender can be a loan shark, in which case you should report the lender immediately to relevant authorities.

Doorstep loan application process

The whole process can be completed within 3-5 days at most. Once you have made an inquiry on the phone or online, the lender will send a representative to your house. This person will ascertain your financial position, your requirements and collect all the required documents. The loan will be disbursed on the very next day if the process is complete and your documents are found to be in order.