- Emma Anderson
- June 27, 2019
Imagine your doorbell rings and someone is waiting to hand a pile of cash to you. It sounds good, right? But nice things generally exist in imaginary world. It is better if you stop daydreaming. Well, you are not hallucinating. Just open the door and you will see someone with cash. Yes, you can receive cash at your doorstep. It is called home collection loan.
As you put in the loan application, you will receive a call from your lender to appoint a meeting with one of the representatives at your home. You will set a date, time and day and the agent will reach your house certainly. These loans are better than other short-term loans as you can solve all your doubts in a face-to-face meeting. The agent will take a look at your credit report, income statement and credit needs to decide the disbursal limit. Since each lender offers these loans at different interest rates, make sure that you have researched beforehand to choose the best lender like Greenwood Loans.
These loans are unsecured and come with very small amount. The disbursal limit varies from lender to lender. Some do not offer more than £500 and some do not offer beyond £1000. Though these loans are more affordable than other small loans, you are likely to fall in a debt cycle if you do not carefully consider your income statement.
An authorised lender will never send the agent at your doorstep to insist you to borrow money even if you need it. The lender will schedule your meeting with a representative only when you have applied for the loan online and you have given written permission to them. A written permission is mandatory to discuss your credit needs even if you have reapplied for the loan without settling your previous dues. If the agent visits your home other than the scheduled time, you can ask them to leave. It is absolutely your decision. A reliable lender will never persuade you borrowing money against your wish.
Home credit loans can take a few days to complete the process depending on how soon you arrange a meeting. Once you agree to all terms and conditions, you will get money on the spot.
Can loans at doorstep affect your credit score?
It will be wrong to say that instant cash loans will not affect your credit score. Each loan, whether it is a small loan or long-term loan, can make or break your credit file. If you pay off your debt on time, your credit score will be excellent. However, the loans cannot help you have your credit rating improved despite timely repayments if your other debts are overdue.
What to do when you do not have enough money to repay your loan
Sometimes a small loan can be difficult to handle due to cash shortfalls. Ignoring the fact that you have repayment difficulties can disturb your finances and damage your credit score as the lender will inform credit reference agencies of your payment defaults. If you feel that you cannot pay off the loan, you should talk to your lender. You will be surprised to know about divergent options. They will allow you to pay the smaller amount so that you can gradually get rid of debt. However, they will inform credit bureaus of your smaller payments and it will pull your credit score.
How to pay back the loan on time successfully
Home credit loans require you to settle your dues within a very short period. It may vary from a two-week period to a month depending on your lender’s policy. The rule of thumb says that you should evaluate your repayment capacity before borrowing money. You must read all terms and conditions of the contract to avoid hidden surprises later. Make sure that you know that what will happen if you fall behind repayments. You should be clear beforehand about processing fees, prepayment penalties and other hidden charges.
An alternative to home collection loans
If you need money for emergency purpose you should use your credit card as it will allow you to have money as instantly as possible. Further, the APR of these loans is less than doorstep loans. However, it does not mean that you will recklessly use your credit card. Make sure that you pay off the money within the grace period and you do not consume more than 30% of your balance. Otherwise, it will pull your credit score.
The bottom line
Whether you take out a doorstep loans or any other small loan, you must remember that even the most affordable loan offer can be serious headache if you fall behind repayments. Instant cash loans at doorstep are undoubtedly manageable, but you will have to whittle down your expenses to have enough money for debt settlement.