Doorstep Loans: Bad Credit Doorstep Loans UK
Doorstep loans or home collection loans date back to the late 1800s. Historically, vouchers were passed on that could be exchanged in shops for clothing, coal and food supplies. Repayments followed on weekly instalments. Today money is loaned out and the borrower in most cases repays the same way. Low income families have remained the target audience, alongside those with bad credit or those new to borrowing. Such folk are excluded from mainstream banking products and it is this that birthed the UK’s subprime lending boom. Online products like the payday loan spiked in the early 2000s, but the home collected cash loan had been there for much longer and eligibility was greatly eased, that aided access.
Bad credit doorstep loans are widely available since all providers understand that their user base will be made up of those unable to qualify for a low rate bank loan or an overdraft. Credit checks are conducted, but past issues including CCJs and defaults can still pass. Likewise, having a low income or being self-employed isn’t an issue. What’s important is that affordability can be demonstrated. An agent could quickly determine this from looking at your recent bank statements. When risk is higher, the lender may lend a small £100 sum to see how well this is initially managed. The weekly repayments often last several months and so this can help to devise a more affordable repayment sum.
A few firms cover extensive areas, but most providers are small businesses covering their local area only. The CCA represents more than 420 home credit businesses that gives you an idea of the size of this industry. More than 1.3 million customers have been referenced as using these products. This is however a fractured tally since Provident has now closed and they had the lion’s share. Lender sites tend to very basic in their design. Amounts and terms tend to also be restricted. Repayment terms are always packaged weekly usually up to the year point, but through an agent can be settled early. Once you’ve applied, an agent will visit you to run through the process within several days.
The Rise and Fall of Provident
The Provident Clothing and Supply Company was established by Sir Joshua Waddilove in the year 1880. They operated across Bradford, but would eventually cover the entire UK as well as Ireland. They acquired Greenwood who had started a little earlier in 1877. Morses Club had also operated as a drapery since 1878. Regardless, it was Provident’s vision and expansion that built the industry. They had built up at their height 900,000 customers and had employed 11,000 agents across the UK. The cracks did however start to show when news of a heavy loss of profit was reported across the year of 2020. Provident’s closure (alongside Satsuma) would be announced on the 10th May 2021.
A wave of complaints had been at the heart of this closure. According to FCA data, this was the 2nd most complained about consumer credit company tallying 41,060 complaints with 43.9% upheld. Amigo Loans for reference were 3rd ranked and they themselves may not survive. Amigo has been the dominant force in the guarantor space. Provident’s larger Group has took a beating, but they’ll move forward with the Vanquis credit card brand. There had been a Vanquis loan for existing customers that is expected to be launched to all soon. The Group also provides car finance through Moneybarn. The market share of door to door loans has now shifted to Morses Club (#1) and Loans at Home (#2).
We wanted to go in-depth on this industry and analyse coverage across the entire UK. Product specs and prices tend to be similar across providers. Having access is the key thing as depending on where you live you may limited options. To analyse coverage, we have conducted research through Lenders Compared that covers most of the market. We’ll add any other firms who aren’t listed so long as they are fully licensed and we have enough information to go off. Lenders Compared only present prices and a few basic other things and so we’ll expand further on firms from checking out their websites although not every licensed doorstep lender strangely even has an online presence.
Going back to the Lenders Compared searches that will be entered across postcodes, in order to decide which locations will be analysed we’ll generally focus on the most highly populated city/town within a county. For England, there are 48 ceremonial counties. We’ll however exclude the City of London (single city) and Greater London (all boroughs). This leaves 46 and so we’ll instead add the top 5 most populated London boroughs (46 + 5 = 51). We’ll follow with the top 5 populated cities/towns of Northern Ireland, Scotland and Wales (51 + 15 = 66). It makes more sense to run top 5s where the supply and demand is much smaller. On population alone, England represents 56/66 million.
= All locations analysed will be added here as soon they are added.
1) South East: 9.2m
*The South East has 9 counties.
~ Largest city in both the county and region with 290k+.
~ Hampshire’s largest city with 270k+ that overshadows local Portsmouth by 20k.
~ The first listed town and this is Buckinghamshire’s MK that is home to 185k+.
~ Berkshire’s leading towns are closely matched, but Slough just edged it with 165k+.
~ Maidstone is Kent’s largest town by some distance with a population of 155k+.
~ Surrounding areas are dwarfed by Oxfordshire’s leading city with 152k+ locals.
~ West Sussex has 2 closely matched towns, but Crawley leads at 114k+.
~ Guildford has a sizeable borough of 150k+, but the town falls down to 85k+.
~ Last on the list is Ryde at 30k+. This is the entry point for those heading to the Isle of Wight.
2) London: 9m
*London has 2 counties Greater London (with 32 boroughs) and the City of London. Our approach was to instead analyse the top 5 most populated boroughs.
~ London’s largest borough at 399k and home to the famous Golden Arches.
~ The home of Crystal Palace is sizeable, yet takes the 2nd spot at 388k.
*Data compiled via www.lenderscompared.org.uk
Last Update: September 15th, 2021.