Home collection loans and home credit loans are also known as doorstep loans or door to door loans. These type of personal loans are delivered into your doorstep by a local company representative. The loan is delivered in cash or vouchers. The payments are also collected in cash by the company agents weekly.
Update 26th March 2020 from Provident Personal Credit – The UK’s largest Doorstep Lender
COVID-19 has presented us all with many challenges that have increased in previous weeks and escalated further since Monday. Across Provident Financial Group we have firm contingency measures in place which vary by business area.
The safeguarding of our customers and employees is utmost and as such Provident (Home Credit) has made the decision to stop all new business activity and our colleagues in the field will be unable to service any new applications until further notice.
This is a temporary measure and we will provide updates as soon as we can.
Doorstep Loan Charges
The annual percentage rate or APR on a home credit loan is normally 200% or more. The repayments are usually on a weekly basis within six to nine months.
Doorstep loans are perceived to be costly. This means you have to scrutinize your finances whether you can afford the weekly repayments. You must also consider other alternatives of borrowing other than this.
Though the APR is lower as compared to a payday loan, the amount of repayment is basically similar because of the longer payment terms.
Should you wish to consider taking a home credit or door to door loans, you can check on the costs through the Lenders Compared website. This allows you to weigh the charges of each home credit lender in your location and find the most affordable for you.
What are the alternatives to door to door loans?
Instead of getting a home credit loan, you can try to explore the following alternatives:
- Check your local credit union and see if they can grant you the loan amount and repayment terms offered by the doorstep lender. The interest rate of a credit union is capped around 42.6% APR, which is much lower from that of home credit loan.
- If you’re getting benefits, check if you can avail for a budgeting loan when it’s necessary during unexpected emergencies.
- You can also try to find out with your local authorities if they offer help to people with sudden emergency expenses. This can either be in cash loans, or in the form of food vouchers. It may vary depending on where you are. Thus, you can reach out to your local authorities and inquire.
What to Do if I have Door to Door Arrears?
When you fall behind payments on your doorstep loans, the company representative or agent will request you to keep your payments up to date. This can entail extra costs, though some agent may waive late payment charges.
In case the agent personally know you, you may find it hard to reason out why you miss payments. Though the agent or representative collects your payments, they cannot take further legal action against you. Unlike bailiffs, they don’t have any legal powers to take out your goods. They can only request, but they can never compel you to pay off your arrears.
Moreover, you are likely to get a default notice once you have not made the payment requested. If this happens your case will be dealt with a larger home credit loan companies.
After the notice of default, further action can be considered. You might check our guide on what creditors can do if you ignore your arrears.
Doorstep Loans and Loan Sharks
Loan sharks are lenders that do not operate under legal terms despite the similarity on how they are run simultaneously as doorstep loans.
If you believe that your door to door or doorstep lender is illegally operating as a loan shark, you can give us a call for advice before getting into their offer.
Advice on Door to Door, Doorstep & Home Credit Loans
Getting out costly credit such as door to door loans can be a wake-up call that you need debt advice.
If you’re thinking of considering a door to door loan, or if you’re coping to pay it, we can provide free and unbiased debt advice. Make use of our online debt advice tool, or call us on 0800 193 1024.