Loans at the comfort of your doorstep! Sounds miraculous, doesn’t it? But it is true; lenders now provide loans at the doorstep of borrowers with minimal documentation and limited hassle. Therefore, if you need small amounts of money and need it urgently, doorstep loans may be the right opportunity for you.
But before you decide to take out one, consider thinking about its merits and demerits.
Let’s first take a look at the benefits:
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1. People on benefits are eligible for Doorstep Loans!
People might be living on benefits, but they may still need some cash for urgencies. Doorstep loans can help in such times, and if you need some extra cash, then you can knock on sure doors (lenders) and get the money you need. Programmes are being run that focus on helping solely people living on benefits or government funds.
Unemployed people can also apply for this loan, and the category is broad including:
- Specially-abled people
- People on benefits with no money in their savings account
- People living on housing benefits
- Disability living allowance, state pension, employment allowance
2. Doorstep loans don’t depend on your credit score
Almost in all countries, people are often concerned about how their credit score will affect their creditworthiness, whether they will borrow money or not? But in this type of loan, there is no such thing.
If you have a bad credit score, you can apply for such a loan, and if you are worried about how the loan will affect your creditworthiness, you need not worry as it won’t.
There is generally no credit inspection done at the stage of the loan application. A person from the agency you have applied for the loan from will visit you and offer your simple terms of the loan, including simple repayment terms (weekly) with little interest information.
You won’t have to worry about accumulating a lot of debt as if you miss a monthly payment, and the circumstances won’t be wrong. Someone from the agency will visit you, so it’s recommended that you don’t miss a payment, but nothing more would happen. Moreover, if you repay the loan on time, then your credit score will improve.
3. No need for collateral
In this loan, you don’t need to be worried about a guarantor or any collateral security. Private lenders in the UK provide the loan in cash without any guarantor or security of collateral.
You already have a mortgage running on the house and need to take out a personal loan but don’t want to go through the ruckus of applying for a loan with a bank. You can try this type of loan without needing to secure your money with collateral or have had your credit score impact you getting the money.
Also, if you miss a payment or pay lesser in installments even then, you won’t have to worry about paying any extra money. You will still pay the principal amount with the interest the lender levied on you. In simpler words, there is no late payment fee.
4. The process is done from the comfort of your home
The most significant advantage of this type of loan is that you don’t have to leave your home to get this loan. All processes and activities can be finished from the home comfort, and this is essential because of few reasons like:
- If not have the time to go around or move around and may need the cash urgently
- Suffering from a disability
- Elderly citizen
- Eligible for childcare or government funds
As the name suggests, the loan is given to you on your doorstep. You don’t have to worry about running from here to there to getting the loan sanctioned. What’s great is that the lender might give you the loan in cash so you won’t have to worry about getting the cheque cashed either.
Moreover, the waiting period for getting this type of loan is lesser than traditional loans.
Now that we have taken a look at the advantages, let’s view the disadvantages:
1. The rate of interest is higher
People with bad credit can take out this type of loan for shorter terms, and this means that the interest rate is going to be higher, considering that it is a type of quick loan and not a traditional loan in which creditworthiness is checked. There is no security involved for repayment, so the lender has to safeguard their investment.
However, the point that should be understood is that if you need the money urgently, then the high-interest rate won’t affect you much. But if you won’t be able to afford the repayments, then you should reconsider.
2. You can’t borrow high sums of money
As this type of loan is a non-traditional loan that doesn’t focus on the credit score or your creditworthiness, it doesn’t let you borrow vast sums of money. This type of loan is an excellent choice if you have smaller expenses or some small debt that you need to pay, but if you want to make a huge or a more significant purchase, getting this type of loan may not cut it.
For instance, if you need a car or a house, this type of financing won’t be sufficient, and you may need to look elsewhere for other types of financing options.
There might be numerous emergencies like a vacation that you need to take with your family on an urgent basis or a health issue (like somebody from the family has been hospitalized). In such a case, when you need a smaller amount of money on an urgent basis, this type of quick loan enters the picture.
In the Nutshell
As you might be busy with the family emergency, you may not have the time to run around to fill out paperwork, so in such a case, a loan at your doorstep proves to be highly useful. You won’t have to go anywhere or knock on the different banks’ doors and fulfill strict eligibility criteria, and you will be able to get the loan.
The process of getting doorstep loan is easy, too, as a friendly agent will visit you and ask you some questions and give you the money you need in cash so you won’t have to be worried about cashing the cheque either. And if you repay in time, it works well for your credit score too!