Finding affordable credit is a problem for many of the UK's poorest members of society. Millions of people right across the UK are being denied access to credit due to low-income levels or high debt. In the past, they have only had traditional lenders such as high street banks to turn to. But, now, thanks to alternative lenders including leading company NowLoan, the tide is slowly beginning to turn.

A Mini Guide To Doorstep Loans In The UK

What are the things you should consider before you take out a doorstep loan?The Moneyadviceservice Advise these simple tips , you need to make sure you can afford to pay the loan back. Most doorstep loan companies are represented by local people. As a matter of fact, the person representing the company is often a personal friend. This is one of the ways doorstep loans are increasing access to credit for the UK's lowest earners. You are much more likely to feel comfortable discussing your personal financial situation with a friend.

You should also check how much you are going to pay in interest. Normally, the faster you pay back a loan, the lower the interest rate is on the amount of money you have borrowed.

Another thing you need to check is the payment frequency. Is your local friendly doorstep lender going to call around on a weekly basis to collect payment? In that case, you need to arrange a time and day when it is convenient for him to do so.

On top of that, you need to agree on a lending period. If you are borrowing a large sum of money, you probably want to extend the borrowing period. Ask your doorstep lender for advice. It is best, to be honest about your income level and any outgoings you have. This will ensure you can meet the terms of the loan and don't risk falling behind with payments.

Do I Need A Credit Check?

Most doorstep lenders don't worry about credit checks, but there are those that do so. Doorstep loan companies often have several different lending schemes available. If you know you are not going to pass a credit check, you must let the doorstep representative know from the start. Don't worry, even when you have a poor credit rating, the lender will do his utmost to help you.

However, if you do have a decent credit rating, but still don't want to approach traditional lenders, you may get a better rate of interest. It is always a good idea to know your credit score no matter what financial situation you happen to find yourself in.

How To Make The Most Of A Doorstep Loan

Thanks to doorstep loans, many low-income earners have been able to upgrade their homes. For instance, it is a good idea to spend your loan on something that will save you money in the long run.

If your old car is always breaking down, you can spend your loan on a new car. Alternatively, why not use your loan to upgrade your appliances to more efficient ones which will subsequently save money off your utility bills.

That being said, doorstep loans can be used on almost anything. You may have received an unexpected bill or need to buy your kids new clothes for the summer.

Manageable Lending

According to Now Loan, doorstep loans provide the poorest in the UK with a way of accessing what they like to call "manageable lending". What does this mean? It means you are borrowing an amount of money that you can afford and manage to pay back. It is not in the interest of your local representative to lend you money you can't afford to pay back.

The amounts you can borrow are normally low, but that does not mean they don't provide a lifeline. For many borrowers, a small amount of money as low as £50 can make all of the difference.

Borrowing money using doorstep loans is an excellent way to access affordable credit. The interest rate on some doorstep loans may even be lower when compared to credit card lending or bank overdrafts. Most of the time you don't have a credit check to worry about and you don't need to leave the comfort of your home to access doorstep loans.