A doorstep loan is a home credit loan. When you apply for a loan, a lender checks your credit rating and income statement to analyse your affordability. If you get approval, the money is directly transferred to your bank account.
It makes sense when you are told to have a functional bank account to borrow money. Doorstep loans are among emergency loans. However, they are a bit different. These loans are generally popular among the unemployed, the disabled and the retired.
You do not need to have a functional bank account to apply for doorstep loans because when you apply for these loans a lender’s representative will visit your house to discuss your credit needs.
You will have to show your income statement to prove that you can afford to pay back the debt. If the representative is convinced of your repaying capacity, they will hand you money on the spot.
The same representative will come to your doorstep to take the money back. As you will get money at the comfort of your home in your hand, you do not need to have a functional bank account.
Doorstep Loan Is Apply By Two Type Borrower
Most of the time borrowers are too confused between things. The first confusion is that can I apply for a doorstep loan if I have no bank account. Yes, you will apply for a doorstep loan if you have a bank account. Where you want money totally depends on the borrowers. Anywhere not like this policy, the bank account’s borrower doesn’t apply for the loan. Doorstep is a service by online lenders. It has nothing to do with your bank account.
The second Confusion is that can I apply for doorstep loans with no bank account. Of course, if you need money. So definitely for this without any hesitation with online lenders.
Doorstep loans are expensive
As doorstep is a service, a lender has to make special arrangements to hold a meeting with you at the comfort of your house. The representative will also visit your house to collect money. For additional services, a lender will charge extra fees.
Doorstep loans are similar to payday loans or cash loans. They carry higher interest rates. Since a lender offers you doorstep service, these loans become more expensive. At the time of taking out doorstep loans, you should check your affordability.
A rule of thumb says that you should use online loan calculators to check the total cost of the loan. The AR of doorstep loans could go up to 1500%. These are incredibly expensive. The repayment length of these loans is generally two weeks or one month.
A lender mostly requires you to repay the debt within a lump sum. If you fail to pay off the debt, you will end up rolling over the loan. Late payment fees and interest will accrue and as a result the cost of debt quickly adds up.
How can you get affordable doorstep loans?
Though doorstep loans are expensive, there are still some ways to afford them. Here are the tips to avail of these loans affordable:
- When you have a good credit rating, you will be able to borrow money at affordable interest rates.
- At the time of borrowing money, you should do proper research. Each lender charges different interest rates. Make sure that you choose a lender that offers the low interest rates.
- Some lenders allow you to make payments in instalments. If possible, choose a lender that accepts weekly instalments. The debt becomes more manageable when you are to pay down the debt in fixed instalments.
- At the time of taking out these loans, you should not have another outstanding debt. If your credit report shows you have got another debt to be paid off, you will likely end up getting money at very high-interest rates as it affects your repaying capacity. For example if you have got quick loans with bad credit and no job, it could be difficult to qualify for doorstep loans at affordable interest rates.
Does it make sense to take out doorstep loans?
Doorstep loans could help tide you over during emergencies, but you should still need to be careful while taking out these loans. Do not apply for these loans if you do not have emergencies. If you can put off the purchase, there is no need to use these loans.
Make sure that you know the difference between needs and wants and avoid funding the latter with these loans. Stash away money for emergencies so you do not end up rushing to online lenders all the time when unforeseen expenses pop up.
The bottom line
To qualify for doorstep loans, you do not need to have a bank account as you will get money on your doorstep. This is a kind of service provided by an online lender.
Because a lender has to make special arrangements for handing in or collecting money, you may find them a bit expensive. Use doorstep loans only when you come across an emergency.