- September 13, 2023
- Mark Elwes
Tips For Getting a Loan on Your Doorstep
Are you having difficulty getting by? Financial troubles are very common, and they can begin to haunt you at any time. Chances are you do not have sufficient money to meet all your expenses, especially unforeseen expenses. For all your efforts to trim down, you find it all the harder to get along on a shoestring.
In such a situation, doorstep loans can be of benefit. These small loans can fund your unforeseen expenses without further ado. Convenience makes these loans so appealing to people when they struggle to keep their heads above water.
However, there are so many things that you must know before applying for these loans. Here are some of the useful tips to help you get doorstep loans:
- Understand the terms and conditions
When the representative comes to your home, you should discuss all the details about the loans so you do not sign up for a deal that does not fit your budget. These loans could be expensive due to upfront fees and hidden fees for delivery services.
Make sure you carefully read the fine print. Understand interest rates, APRs, and associated fees. If you do not understand anything, ask them openly. Do not sign if you are not sure or you have doubts.
- Find out if the loan comes with strings attached
Most of the times, doorstep loans come with no strings attached, but you should still look out if you are to meet any additional condition or formality. Based on the borrowing sum, it depends on whether a lender will ask you to arrange a guarantor or not. Doorstep loans do not usually ask for a guarantor, nor do they ask for collateral.
- Review the lending company
It is so easy to apply for a doorstep loan, but before filling in the application form, you should carefully scrutinise the loyalty of the company. Go to the official website of the lender and see if it provides all the details that you need to decide on whether or not to borrow money. Make sure no ambiguous terms are used in the landing page.
Check out the testimonials and reviews of the lender on Google or a third-party review website like Trustpilot. You will read real reviews by real people to get to know the experience of other borrowers about the loan products and the lender. You can move to another lender if you find that most of them have complaints about their services, expensive deals and unethical withdrawals.
- Know your repaying capacity
Although a lender will run an affordability check before handing in money, it is still your responsibility to check whether you can manage payments. You cannot just leave everything to a lender and sit back. Online loan calculators can get the estimated cost of the loan, and when you get the actual quote, you should see if the final payment easily fits your budget.
You should sign the agreement if you can manage to pay for other expenses along with your debt payment. Otherwise, do not do that. However, if there is a possibility to manage instalment payments, you should insist on weekly or bi-weekly instalments. A lender is more likely to consent to your proposed payment schedule rather than go back without closing the deal.
- Do not be too worried
Lenders are always willing to lend you money as long as you have proof to show you can repay the debt. Even if you are on benefits, you are eligible to get doorstep loans. In fact, this is when these loans seem to be the best alternatives to small, unsecured loans for bad credit.
Your bad credit score will not get in your way as long as you have the potential to repay the debt. Discuss everything in detail with your doorstep agent and then sign the agreement.
- Important terms you must know
Here are some of the terms that you will find in your agreement. You should know about them so you do not get ugly surprises down the line.
- Interest rates vs APR
The interest rate is charged on the principal amount. Factors that determine the interest rate include the size of the loan, repaying ability, credit score, and the lending company’s policy.
The APR is the compound interest rate charged on the loan amount. This impact is significantly seen when you roll over the loan.
- Repayment period
The repayment period of a doorstep loan could be a two-week period, a month or two months. It is rare or rare that this will exceed three months. The repayment method depends on the repayment term.
The more extended repayment period allows for instalment payments, while the shorter repayment period demands a lump sum payment. Make sure you carefully understand the impact of the repayment length on your budget.
- Upfront fees and monthly fees
It depends on the lender’s policy whether or not the fees will be bifurcated. Most of the time, it is kept hidden, and the APR is calculated, including fees. Upfront fees and monthly fees could be disclosed, but you will still be paying extra fees that remain hidden.
The final word
Doorstep loans can be worthwhile when you come across some unexpected expenses, and your savings do not have enough money. These loans can be expensive, so it is suggested that you carefully assess your repaying capacity.
Understand all terms related to loans, check your eligibility and the cost of the loan using an online loan calculator. Discuss all requirements with the loan agent and make sure that you will not struggle to pay off the debt along with other expenses before you sign the agreement.
If there is any requirement for a guarantor, understand the risks and consequences, as you both will suffer from the damaging impacts of missed payments or defaults.
Mark Elwes is the Editor-in-Chief at Extramilefinance. He is a notable member of the content strategy team since his joining in 2017. Driven by his fondness for the finance industry, he has spent years gathering as much knowledge as possible about various financial products that include loans also. Previously, Mark worked as a senior journalist writer with experience in writing blogs and articles.