Home >>>>>>>>>>>>>>>>>Doorstep Lending
Doorstep lending, sometimes called door to door lending is a service provided by a large number of sub prime lenders which allows individuals with an problematic, adverse or poor credit history to borrow small sums of cash over relatively short periods of time to supplement their household incomes. Repayments are made weekly or fortnightly. Sub prime lenders operate through a network of agents (often paid through commission) who visit individuals in their own home.
Doorstep lending is a growing and important part of the sub prime lending market. It is also a popular way of borrowing and it is not hard to see why. The convenience of borrowing in your own home is very attractive and the personal relationship between the borrower and the lending agent, who may be part of the local community and may well be known already to the borrower, is also important. This means that it is relatively easy for borrowers seeking loans for relatively small sums to obtain access them.
There are hundreds of companies in this market in the UK , although the market is dominated by about three or four companies. While this form of lending provides some element of convenience as transactions take place in peoples own homes, interest rates and associated charges are higher (often substantially higher) than for loans from many other categories of mainstream lenders. This means that doorstep lending is seen by some as a particularly controversial area of the lending market.
Because of their more relaxed credit history requirements their main market is those who find it difficult to borrow from other sources. These are often more economically vulnerable individuals whose economic circumstances may make door to door lenders their only option. Lenders argue that the higher interest rates are justified because of the extra risk of lending to individuals with imperfect credit histories.
