Do you need to pay the doorstep loan agent for their services?
When you need urgent cash at your home, you can consider a doorstep loan. It helps you get the money delivered to your doors within 45 minutes. The loan provider’s agent or the representatives reach the person’s home to complete the loan procedure.
He conducts a few checks like income and ID to analyse your affordability. Accordingly, he hands over the cash to the borrower as per the agreement. Later, the service agent might return to receive the loan payments as per the agreement. This is how the doorstep loan process works.
It is natural to have concerns like – “Do I need to pay the doorstep loan agent for the services?” If you, too, have such a question, then the blog may help. It discusses the answer to this question in detail.
5 Facts you must know before taking up a doorstep loan
Doorstep loans are unsecured personal loans with small payouts. You don’t need to provide collateral or a guarantor to get one. Instead, you may qualify by just providing a valid ID, account number, and proof of income. Here are other facts to consider:
a) No agent can visit if you don’t apply
It is a basic rule of thumb on a doorstep loan. Before the agent, you provide an online loan application to the respective direct lender. The loan provider sends one of his representatives after analysing your application. So, if you have not applied online or offline, don’t expect one.
- You don’t pay money upfront
No legal loan provider asks you to provide a sum upfront to get a loan. It is an illegal practice. Hence, stay away from the one that asks you to. Instead, you cover the loan payments in instalments after approval. You can seek help from creditors if you struggle with payments. Facilities like door to door loans allow you to re-schedule the payments. It helps you repay according to what you can afford.
c) Missing a payment increases the costs
Doorstep loans share an APR of 400%. It is more costly than a small personal loan. The reason is the ease of availability and low documentation and eligibility requirements. Moreover, the repayments stay low as the maximum you can borrow is £1100. Missing a payment here increases the interest and leads to penalties. You thus pay more eventually.
- No one can force you into confirmation
No legally operating firm will force a borrower into accepting the terms or taking up the loan. You can deny it if you don’t find the agreement ideal for your situation. It would not cost a dime. However, you must do it within a specific timeline, according to the respective provider.
- Agents cannot claim belongings
A doorstep loan agent comes to your house to collect the repayments. However, you are not obliged to pay if you cannot do so (presently). He does not share the right to claim the assets or any of your belongings. Agents cannot force you to make the payments; they can only request them.
What to expect from the doorstep loan agent?
A doorstep loan agent follows the lender’s guidelines. He analyses your situation, cash needs, and the amount you can afford. He may also conduct a basic credit check. It would not affect your credit score. You generally need to provide valid proof of earnings for the process. Later, he will explain the terms in the simplest way for you to understand.
It is the basic quality of an experienced and verified loan doorstep loan agent. He is responsible to deliver the loan amount and take loan instalments to and fro. He cannot force you into paying or report the non-repayments.
You just need to check your repayment schedule as to when you can expect the agent. However, conduct due diligence before handing over the money. Verify his identity by contacting the loan provider. It will help you remain conscious of the fraudulent agents.
What documents should you provide on doorstep loans?
Generally, you don’t need a credit report or a bank account to get a doorstep loan. You can provide if you have one. But you don’t need to panic if you don’t. Instead, you must be ready with the below-listed documents that an agent may ask for loan confirmation:
- Income proof- salary slip/pension/ self-employed income/ rental income
- Proof of residential address- valid electricity or water bill with updated address
- A valid ID proof – license/passport/National Insurance Number
- Bank statements of at least the last 6 months
- Some loan providers may also check whether your house is on mortgage.
Should you pay the doorstep loan agent for service?
No, you don’t need to pay the doorstep loan agent for their services. The loan does not involve any upfront payments. Thus, beware of the loan agents that ask for one. Instead, you pay the total loan costs or amount in instalments after the loan approval. Here is the breakdown of the costs you can expect on a doorstep loan:
i. Loan origination fees
The loan origination fee is an amount that the lender deducts before releasing the loan amount. You can find it in the percentage form. It covers fees like- credit checks, paperwork and further loan processing. The loan providers charge one to recoup the losses.
- Late payment fee
Lately, paying the loan dues affects interest payments. You eventually pay more than you must on the loan. You must pay £12 extra on the loan if you pay the dues late. Generally, you must repay the dues within 24 weeks of the doorstep loan. However, some loan providers offer the facility to clear the dues within a year.
Thus, you may consider a 12 month loan to repay the dues comfortably. It reduces your monthly repayment amount drastically. It prevents you from attracting unnecessary penalties. However, increasing the loan term may mean more interest payments. Therefore, decide it wisely.
- APR
It is the overall costs including the interest that you pay on a doorstep loan. You may get the representative % if you are one of the 50 applicants. You may generally find it in percentages like 49.9%. The higher the APR, the more you pay on the loan. Missing a payment increases interest and, eventually, the APR.
- Early repayment fee
You must pay an early repayment fee if you pay more than the expected amount on a loan. It could make the loan costly. Always confirm whether the loan provider offers the facility to overpay. Otherwise, you may expect to pay a penalty.
Bottom line
When you take up a doorstep loan, you welcome the lender’s representative. He completes the loan procedure on the lender’s part. He checks, analyses, and confirms your affordability before handing over the cash. However, you don’t need to hand over the cash to that specific person. Instead, you repay the loan amount in easy instalments according to your affordability. It cancels out the possibilities of any upfront costs on the doorstep loan.
Ailsa Adam is the Editor-in-Chief and former content head at Hugeloanlender. She has been a valuable member of the content strategy team since 2017 due to her abundant experience in the finance sector. Passionate about helping individuals navigate the world of loans and personal finance, she has dedicated herself to acquiring extensive knowledge on various financial products. Before her role at Hugeloanlender,
Ailsa worked as a seasoned journalist and writer, specialising in creating informative blogs and articles on diverse loan types. She is known for her meticulous research and commitment to delivering accurate and engaging content. She holds a degree in MBA Finance and has a keen interest in creative writing and art.
