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Home credit (Doorstep loans)
This information applies to England, Wales, Scotland and Northern Ireland
About home credit
Home credit, or doorstep loans, is where you borrow money and the lender calls at your home to collect the repayments. The loans are usually for smaller amounts and you will be charged a high rate of interest for borrowing in this way.
Checking a lender is licensed
The law says that home credit lenders have to be licensed by the Office of Fair Trading (OFT). You can find out whether a home credit lender is licensed by checking the Consumer Credit Register on the OFT website at www2.crw.gov.uk.
If someone offers to lend you money on the doorstep, it's a good idea to ask to see their lender’s licence or other authorisation. If they don’t have one, they are operating illegally and you should avoid borrowing from them.
For more about illegal lending, see Loan sharks.
Complaining about home credit
Many home credit lenders belong to the Consumer Credit Association (CCA) and follow the CCA Code of Practice. If you have a problem with a CCA member, you can complain to the CCA. You can get more information about the Consumer Credit Association and its code of practice on the CCA website at www.ccauk.org.
It is a criminal offence to try to make a cash loan outside trade premises unless the visit is made to your home in response to a written and signed request. If an agreement is not properly made, the lender may not be able to force you to repay the money.
If you are not sure whether an agreement has been properly made, you can get help from an adviser, for example at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.
Comparing home credit loans
You can compare home credit loans on Lenders Compared, an independent comparison website at www.lenderscompared.org.uk.
Trading cheques and vouchers
Doorstep lenders may also offer trading cheques and vouchers. These can be exchanged for goods, usually clothing and soft furnishings and usually at specific shops. You repay the amount to a company agent who normally calls at your home. Interest rates are often high for this type of credit.
Further help and information
On Adviceguide
For more information about different ways of borrowing money and getting credit including dealing with loan sharks, see Types of borrowing.
You may also find the following Adviceguide information helpful:
- Getting the best credit deal
- Credit cards
- Credit
- Banks and building societies
- Increasing your income
- How to spend less
- Help with debt in England, Wales and Northern Ireland
- Help with debt in Scotland.
The Money Advice Service
The Money Advice Service is a free, independent service. Their website (www.moneyadviceservice.org.uk) has lots of useful information about borrowing and managing your money.
Go to their website for more information about:
Consumer Credit Association (CCA)
Consumer Credit Register
Lenders Compared
