What is a doorstep loan?
A doorstep loan is a cash loan delivered directly to your doorstep. A representative will come to your home to process your application and collect payments.
However, these loans are one of the most expensive ways to borrow. Interest rates can be extremely high (up to 1557.7% APR* vs a maximum 42.6% APR with us) and could mean you are paying back far more than you need to. Payments are collected weekly by the lender visiting your home, meaning it can be easy to fall behind on repayments quickly.
It may be tempting to turn to a convenient doorstep loan in times of need however this can only add to debt problems further down the line.
What is a loan shark?
Doorstep lenders should be registered with the FCA, if not they are acting illegally. Illegal lenders are also known as loan sharks. Loan sharks don’t just go door-to-door. They operate in all sorts of places and will aim to appear as a friend helping you out. However, the illegal nature of the loan can lead to things turning nasty.
Why you should always avoid loan sharks:
- No paperwork or proof of how much you owe or have repaid – it’s your word against theirs
- Risk of violence, threats or intimidation if things go wrong
- Rates, repayment amounts and charges may change at any time
- Your repayments may be helping to fund organised crime
Read more about loan sharks on the Money Advice Service website.
Always check that any lender you consider is registered with the Financial Conduct Authority (FCA). If you have spotted a loan shark operating in your area, or have borrowed from one, you can report them here.
What is the alternative?
The Money Advice Service lists credit unions as an alternative to doorstep loans. This is because we act in the interests of our members. We are also registered with the FCA, unlike loan sharks.
The London Mutual Credit Union difference:
- Fair and straightforward interest rates with no hidden fees
- Consumer rights and legal protections
- A personalised application process, based on your ability to repay
- The ability to improve your credit history and to build savings
- No penalties for repaying your loan early
A £1,000 loan paid back over 12 months will cost you…
- £205.04 with us (£1,205.04 to repay)
- £317.19 from Bamboo (£1317.19 to repay)
- £872.00 from Provident (£1,872.00 to repay)
- £992.00 from Satsuma (£1,992.00 to repay)
When you borrow from us our friendly team are always on hand to help you with any questions about your loan. And, our members have given us a 4.7/5 rating on Trust Pilot.
Learn More About Applying for a Loan
Learn more about how the process works, how long it will take, and your chances of being approved.
About LoansWhat can I use a Credit union Loan for?
When you apply for a loan with us we will ask you what the loan is for. There are many reasons you may need to borrow, and a loan from London Mutual Credit Union can be an affordable way to spread the cost of:
Home Improvements
Whether it’s a loan for new furniture or a larger project such as a new kitchen or conservatory, we can help.
Paying off Debts
Pay off your credit card or overdraft sooner with one monthly repayment at a reduced interest rate.
Buying a Car
Borrowing from a credit union can often be cheaper than purchasing via car finance.
Building Credit
We can help you re-establish good credit by starting small and building from there.
Short-term Expenses
Don’t lose sleep over a broken washing machine or boiler – let us help you with the unexpected.
Visa Fees
Fees shouldn’t be a barrier to settling in the UK. A credit union loan could enable you to settle sooner.
What should I do if I already have expensive debts?
If you have already borrowed from an expensive lender you can still save money on interest by moving your loan over to us.
See How Much I Could SaveIf you have borrowed from a loan shark you can report them here.
*Provident – www.providentpersonalcredit.com – checked 19 November 2020
