There are so many financial products available to people who need to borrow money, it can be difficult to decide what one would be best for you.
You will, obviously, first look at the interest that will be paid and try to get the cheapest that is available to you. Doorstep loans will typically have an APR from 200% to 400% so whilst they may not be the cheapest option available there certainly are other advantages.
When you decide to take out a loan, you will (hopefully) be in a position to pay it back; you will work out your finances and work out the repayments. But what happens if those circumstances change part way through the loan agreement? If you suddenly find that your income has been reduced and you can no longer afford to make repayments what will happen? With a Doorstep Loan there are no additional charges that are added if you miss repayments.
Mr Smith has a loan of £400 with £180 interest and pays back £20 a week, the loan is over 29 weeks. Mr Smith has made 15 weeks payments bringing his balance down to £280. He then finds out that his hours at work have been cut and his income reduced meaning he can no longer afford £20 a week. He speaks to the Doorstep Loan company and agrees to pay £10 a week instead. This will take 28 weeks to pay the loan off meaning Mr Smith will go over the repayment period by 14 weeks, however it will cost him nothing extra, he will still have paid the £180 interest. It will affect Mr Smith’s credit rating with that particular company but will cost him no additional money.
As we can see from the example above, one of the main advantages of a Doorstep Loan is the peace of mind that you will never pay any additional interest if your circumstances change.
Another advantage of a Doorstep Loan is the personal touch that you get. You will have a dedicated agent that will call to collect your repayments on a regular basis. If you have anything you wish to discuss, you can speak to them, rather than having to hone a call centre and speak to a faceless voice on the phone.
Many Doorstep Loan companies will deal with people who have a poor credit rating. If you do not have a credit rating that will allow you to get a loan from the mainstream lenders such as banks or credit cards then a Doorstep Loan may well be the way forward. Many Doorstep Loan companies will still perform a credit check and may well not accept you if you have County Court Judgements but they are far more likely to accept people with poor credit than the mainstream lenders.
Doorstep Loans are a fantastic way to keep control if you have to take out a personal loan. You know you will never pay any extra additional charges, even if there are unexpected changes in your life!