{"id":1451,"date":"2020-03-11T18:56:50","date_gmt":"2020-03-11T13:26:50","guid":{"rendered":"https:\/\/www.extramilefinance.uk\/blog\/?p=1451"},"modified":"2020-03-11T18:56:52","modified_gmt":"2020-03-11T13:26:52","slug":"doorstep-loans-traditional-lending-vs-contemporary-lending","status":"publish","type":"post","link":"https:\/\/www.extramilefinance.uk\/blog\/doorstep-loans-traditional-lending-vs-contemporary-lending\/","title":{"rendered":"Doorstep Loans: Traditional Lending VS Contemporary Lending"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_52 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69f4dd4009d88\"><span class=\"\"><span style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69f4dd4009d88\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.extramilefinance.uk\/blog\/doorstep-loans-traditional-lending-vs-contemporary-lending\/#Doorstep_Loans_%E2%80%93_The_Old-Fashioned_Way\" title=\"Doorstep Loans \u2013 The Old-Fashioned Way\">Doorstep Loans \u2013 The Old-Fashioned Way<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.extramilefinance.uk\/blog\/doorstep-loans-traditional-lending-vs-contemporary-lending\/#Doorstep_Loans_%E2%80%93_The_Modern_Way\" title=\"Doorstep Loans \u2013 The Modern Way\">Doorstep Loans \u2013 The Modern Way<\/a><\/li><\/ul><\/nav><\/div>\n\n<p>Lending\nhas drastically evolved. There were times when you would go to a financial\ninstitution in-person to complete all formalities to borrow money. Massive\npaperwork \u2013 from filling out an application form requiring your personal and\nfinancial details to documentation for verification of your financial wellbeing\n&#8211; and waiting for a couple of days to get money in your account were\npredominant features of traditional lending.<\/p>\n\n\n\n<p>One\nof the drawbacks of traditional approach was that many people had no permission\nto borrow money in case of questionable creditworthiness. Secondly, the slow\nprocess showed harmful effects on people in need of cash for emergency reasons.\n<\/p>\n\n\n\n<p>Bearing\nthese factors in mind, financial institutions made the lending process simpler\nand more flexible and then the concept of contemporary lending was introduced.\nIt is nothing but online lending. As the name suggests, you do not need to go\nin-person to a financial institution to apply for a loan. You do not need to\nfill out horrifying and lengthy application forms, nor do you have to get into\nthe hassle of documentation. <\/p>\n\n\n\n<p>Lending\nfirms aim at providing you with quick access to funds and hence they have\nremoved unnecessary hassle. The priority is to evaluate your creditworthiness\nso that you do not borrow more than your affordability, which they can\ndetermine by getting your credit report from any of these three credit\nreference agencies \u2013 Experian, Equifax and TransUnion. <\/p>\n\n\n\n<p>Online\nlending emerged as a boom to borrowers with bad credit. While traditional\nlending would keep such borrowers from taking out a loan, online lending has\nmade it possible. This blog shows the detailed comparison between conventional\nand modern lending of doorstep loans with its pros and cons.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Doorstep_Loans_%E2%80%93_The_Old-Fashioned_Way\"><\/span>Doorstep Loans \u2013 The Old-Fashioned Way<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A\ndoorstep loan is a small personal loan that allows you to get money at your\ndoorstep. You will fill in the application form, and the agent of a lender will\nschedule a meeting at your home to evaluate your creditworthiness. You will\nhave to tell the agent how much money you want to borrow, and the agent will\nlook over your income statement to check your affordability. <\/p>\n\n\n\n<p>Once the agent is sure about your repaying capacity, you will get money on the spot. <strong><a href=\"https:\/\/www.extramilefinance.uk\/loans\/doorstep-loans.html\">Doorstep loans<\/a><\/strong> introduced to help people tide over who do not have a functional bank account and are senior citizens, unemployed or disabled. You will get money in your hand after signing the agreement revealing other conditions associated with the loan. <\/p>\n\n\n\n<ul><li>The\nlength of such loans is not more than a month, and the size of the loan varies\nbetween \u00a31,000 and \u00a32,500.<\/li><li>The\nagent will visit you to collect funds on the due date. Most of the time, such\nloans require you to pay in a lump sum. <\/li><li>However,\nsome direct lenders try to be a bit flexible and therefore divide it into\nweekly or bi-weekly instalments.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Doorstep_Loans_%E2%80%93_The_Modern_Way\"><\/span>Doorstep Loans \u2013 The Modern Way<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>So far, it seemed like doorstep\nloans are affordable as you do not have to make larger payments and you can pay\nthe whole of the money at once, but all direct lenders were way off beam. Over\ntime, there had been an increasing number of cases of defaulters. More than 75%\nof people found it difficult to pay back the money. They continued to end up rolling\nover a loan and eventually fell in a debt trap.<\/p>\n\n\n\n<p>Considering the struggle faced by borrowers, some new steps were introduced to the lending criteria. It encouraged direct lenders to extend the repayment period of doorstep loans to 12 months. The other name of these loans is <strong><a href=\"https:\/\/www.extramilefinance.uk\/loans\/12-month.html\">12 month loans for unemployed<\/a><\/strong>. <\/p>\n\n\n\n<p><em>12-month\ndoorstep loans are those that require you to pay the amount over a period of 12\nmonths. <\/em><\/p>\n\n\n\n<p>One of the most significant benefits\nof these loans is you can borrow a large amount. Since you will pay down the loan\nin fixed monthly instalments, you will not likely fall behind repayments. <\/p>\n\n\n\n<ul><li>The\nagent will allow you to borrow money up to \u00a35,000 depending on your\naffordability and credit needs.<\/li><li>Such\nloans will help you build your credit rating because each payment will be\nreported to credit reference agencies.<\/li><\/ul>\n\n\n\n<p>Both\ntypes of doorstep loans are available on the market. Which kind of loan will\nsuit your budget depends on your financial circumstances. <\/p>\n\n\n\n<p>If\nyou want to take out a loan to build your credit rating, you should take out 12-month\ndoorstep loans. A credit score goes up if you dedicatedly make all repayments. <\/p>\n\n\n\n<p><em>Small doorstep loans do not contribute to credit score building because the repayment term is not long enough to have an idea of your financial behaviour in case your financial circumstances change. <\/em><\/p>\n\n\n\n<p>Whether\nyou take out regular doorstep loans or 12-month doorstep loans, make sure that\nyou do not commit a default. Otherwise, you will end up paying late payment\nfees and interest penalties. In case you feel that you cannot pay your\ninstalment, you should immediately inform your lender. They may help you by\nchanging your repayment plan. Prior intimation can help you avoid late payment\nfees. <\/p>\n\n\n\n<p>The\nlending industry is continually evolving to enhance the borrowing experience,\nand doorstep loans have proved it. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>A doorstep loan is a perfect way to finance your needs when you are unemployed. This blog discusses the old-fashioned and modern way of doorstep loans<\/p>\n","protected":false},"author":1,"featured_media":1452,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.extramilefinance.uk\/blog\/wp-json\/wp\/v2\/posts\/1451"}],"collection":[{"href":"https:\/\/www.extramilefinance.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.extramilefinance.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.extramilefinance.uk\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.extramilefinance.uk\/blog\/wp-json\/wp\/v2\/comments?post=1451"}],"version-history":[{"count":1,"href":"https:\/\/www.extramilefinance.uk\/blog\/wp-json\/wp\/v2\/posts\/1451\/revisions"}],"predecessor-version":[{"id":1453,"href":"https:\/\/www.extramilefinance.uk\/blog\/wp-json\/wp\/v2\/posts\/1451\/revisions\/1453"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.extramilefinance.uk\/blog\/wp-json\/wp\/v2\/media\/1452"}],"wp:attachment":[{"href":"https:\/\/www.extramilefinance.uk\/blog\/wp-json\/wp\/v2\/media?parent=1451"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.extramilefinance.uk\/blog\/wp-json\/wp\/v2\/categories?post=1451"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.extramilefinance.uk\/blog\/wp-json\/wp\/v2\/tags?post=1451"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}