Be it constant cash crunch, poor debt management or an emergency expense, doorstep loans can certainly be used as a short cash gap loan in the UK. These are non-conventional small cash loans to your door on a weekly payment basis. However, the convenience of doorstep loans comes at an additional cost.
Before you use this ultra convenient home credit facility, it is important to understand the pros and cons of the financial decision. Listed below are Do’s and Don’ts of borrowing doorstep loan in the UK.
Do’s of borrowing Doorstep Loans in the UK
1. Do take a calculative decision
Before you apply for a doorstep loan, it is important to analyse the impact of the loan on your credit report. For, doorstep loans are expensive means of borrowing and make a solid footprint on your credit report.
Your decision to avail doorstep loans should be a well calculated one wherein you have a clear-cut repayment plan in place.
2. Borrow for short period
Owing to the high cost of doorstep loans, it is important to use the home credit facility for a very short period. You should not borrow doorstep loans for more than a few weeks.
3. Do repay on time
Being very short cash loans, the doorstep loans offer the flexibility of weekly or fortnightly repayments. You should ensure that you repay on time. For the cost of rolling over doorstep, loans are very high and it would also hurt your credit report beyond repairs.
4. Do check the credentials of the lender
It is widely known that loan sharks are always on a run for doorstep borrowers. Thus you should always use a broking advice from a reliable loan broker authorised by FCA which is the financial watchdog in the UK. A registered broker would introduce you to reliable lenders and there would be no risk of dealing with a loan shark.
5. Prepay if possible
You can prepay the loan if possible as it will save you enough interest amount. Besides, it would boost your credit score.
Don’ts of borrowing doorstep loans
1. Don’t borrow more than required amount
It is important to keep a check on the amount you borrow. You should try to borrow less than £1000 as a doorstep loan. Never raise a loan for more than what you require.
2. Don’t delay the repayment
The cost of delayed repayment could be high and you should thus ensure that there is no delay in any circumstances.
3. Don’t borrow with the very high rate.
Before signing the paper, you should consider the cost of loan carefully. It is important to not raise a loan at the very high-interest rate. Also, try to keep the loan for the shortest possible duration.
4. Don’t sign the deal without knowing all terms
Although the loan agent would accompany you throughout the doorstep loan journey, it is still advisable that you read all the documents carefully. This saves you from last minute surprises.
5. Don’t repeatedly avail these loans
The convenience of ready funds in the form of doorstep loans might make them attractive to you for future use; however, you should not borrow them frequently.
Knowing the Do’s and Don’ts of doorstep loans you can make an informed decision. However, if you still have more doubts about home credit, do not forget to contact a loan broker. They can guide you without charging any upfront fees.