What doorstep loans are
Doorstep loans, sometimes called home-collected credit, are cash loans repaid to an agent who visits your home. The agent may collect payments in person, usually at a set interval, and may also issue a payment card or give you a way to pay by other means.
They are different from a standard personal loan because the collection is arranged around home visits. That can feel convenient if you prefer face-to-face contact or do not use online banking. Before agreeing, treat it as a serious borrowing decision: compare the total cost, check the lender is authorised, and ask what happens if you miss a payment.
Doorstep lending is not the same as illegal money lending. Legitimate firms must be authorised by the Financial Conduct Authority, and you can check a firm or individual on the FCA register. If someone offers you a loan without paperwork, pressure, or threats, that is a warning sign of illegal lending, not regulated doorstep credit.
How doorstep loans work
Most doorstep loan applications follow a similar path. The lender or agent gathers information about your income, spending, existing debts and the reason for borrowing. Under FCA rules, the lender must assess whether the repayments are affordable for you, not simply check that you have some income.
If the application proceeds, the lender must give you pre-contract information and a credit agreement. Under the Consumer Credit Act 1974, you normally have a right to withdraw from a regulated credit agreement within a short cooling-off period, and the agreement must set out your rights. The lender must also show the representative APR and the total amount payable before you sign, so you can see the cost in context.
Repayment is commonly collected at home, but you should not assume the agent must always visit. Ask whether you can repay by bank transfer, card, or early settlement. If you want to repay early, regulated agreements often allow it and may reduce the interest you pay. The early repayment guide explains how to check the figures.
The cost of doorstep loans and why APR can look high
Doorstep loans often have higher costs than mainstream personal loans because of the labour involved in home collection and because lenders may serve customers with limited credit histories. A high APR is not automatically unlawful, but it must be disclosed clearly. APR is a standard way to compare the cost of credit, though it assumes the loan runs for its full term and you make every payment on time.
Do not compare only the weekly or monthly repayment. Ask for the total amount payable, the interest rate, any fees, and what happens if you pay late. The guide to how APR works can help you read the figures.
Under FCA consumer credit rules, firms must act fairly and communicate in a way that is clear, fair and not misleading. They should not pressure you into borrowing more than you can repay or into rolling a loan unnecessarily. If the cost feels unmanageable, that is useful information: it may mean this product is not suitable for your budget.
Your rights and the rules lenders must follow
Doorstep lenders are subject to the Consumer Credit Act 1974, the Financial Services and Markets Act 2000 framework, and FCA rules including CONC. These rules cover advertising, pre-contract disclosure, affordability, arrears handling, statements, and complaints.
You have the right to receive regular statements and notices, and to challenge unfair treatment. If you are struggling, the lender should consider forbearance, which can include accepting smaller payments for a period, freezing interest, or giving you time to get debt advice. If you have an unaffordable credit agreement, you may have grounds to complain, and in some cases the court can consider an unfair relationship under section 140A of the Consumer Credit Act 1974.
If a complaint is not resolved, you can take it to the Financial Ombudsman Service. The complaints guide explains the process. For legal detail, see the Consumer Credit Act 1974 and the FCA's Consumer Credit sourcebook (CONC).
Doorstep loans compared with other borrowing
| Feature | Doorstep loan | Personal loan | Credit card |
|---|---|---|---|
| Repayment collection | Often collected at home, though other methods may be available | Usually by direct debit | By minimum payment or flexible amounts |
| Cost disclosure | Representative APR and total payable must be shown before signing | Representative APR shown for the advertised term | APR applies to balances; statement shows interest and charges |
| Affordability check | Required by FCA rules | Required by FCA rules | Required by FCA rules |
| Best suited to | Borrowers who value home collection and can compare the full cost | Borrowers with a clear repayment plan and bank account | Borrowers who need flexible short-term credit and can clear balances |
The table is not a recommendation. Before choosing, compare the total cost with a credit union loan, a budgeting advance if you receive certain benefits, a mainstream personal loan, or a credit card. The loan comparison guide sets out a practical method.
Risks, missed payments and debt spirals
The main risk with any high-cost credit is that a repayment becomes unaffordable after your circumstances change. If you miss a payment, the lender should contact you and try to agree a realistic plan. It should not harass you, and it should not add charges that are unfair or unexplained. Missing payments can affect your credit file, though not every doorstep lender reports to every credit reference agency.
Do not take a new loan to repay an old one without getting advice. Consolidating door-to-door debts can make the problem worse if the new loan has a longer term or a higher total cost. If you are behind on priority bills such as rent, council tax, energy or water, deal with those first and get free debt advice. The missed payment guide explains what to expect.
Warning signs include an agent encouraging you to borrow more, refusing to provide paperwork, taking your benefit card or bank card, or making you feel unable to say no. If that happens, stop and get help.
Alternatives to doorstep loans
There are several alternatives to doorstep loans, depending on your circumstances. A credit union loan may be available if you save with the credit union or live in its common bond area. A mainstream personal loan may work if you have a steady income and a good credit file.
If you receive certain benefits, a Budgeting Advance or similar government support may be possible, though it is not a general loan. For household bills, contact your supplier to ask about a repayment plan. For problem debt, free charities such as StepChange and Citizens Advice can help you compare options. You can also read the alternatives to payday loans guide.
Before borrowing, use a budget planner and check whether you can make the repayments if your income drops. The government's debt advice service can point you to free, impartial help. Debt advice is not a loan and does not affect your credit file simply because you ask for it.
Questions to ask before signing
Use this checklist before you agree to a doorstep loan.
- Is the lender authorised by the FCA? Check the firm and the agent on the FCA register.
- What is the total amount payable, including interest and any fees?
- What is the representative APR, and is it the rate you will actually pay?
- How often will the agent visit, and can you repay by another method?
- What happens if you miss a payment or want to repay early?
- Can you afford the repayment if your income falls or an unexpected bill arrives?
- Have you compared a credit union, a personal loan, a credit card, or free debt advice?
If the answers are unclear, do not sign. A legitimate lender should give you time to read the agreement and should not rush you. For more help, see the affordability guide and the FCA regulation and your rights guide.