Home Credit or Doorstep Lending in the UK [The Real Cost, Risks, and Smarter Alternatives in 2025]

Published in Business

May 15, 2025

3 min read

Home credit, also known as doorstep lending, is a type of short-term borrowing where money is delivered to your home, and repayments are collected in person every week. While it may sound convenient—especially for people with poor credit or no access to mainstream banking—it comes at a high financial cost.

In this comprehensive guide, we’ll explore:

What home credit is and how it works
The real cost and risks of doorstep loans
Smart alternatives you should consider
Expert financial tips to avoid debt traps

This article is part of our Personal Loan Market Series on OneShekel.com.

What Is Home Credit or Doorstep Lending?

Home credit is a type of cash loan service where a lender sends an agent to your home to deliver the loan amount and later collects weekly repayments in person.

It’s primarily targeted at people:

With low credit scores
Without bank accounts
On low or fixed incomes
Who prefer face-to-face transactions

Typical Features

Loan amounts: £100 to £1,000
Duration: 12 to 52 weeks
Collection method: Weekly in-person visits
APR: Often between 200%–1,000%

How Doorstep Loans Work Step by Step

Application: Usually done via phone, local agent, or a simple online form.
Assessment: Some lenders do soft credit checks, others don’t.
Approval: If approved, a local agent brings the money to your home.
Repayment: You repay in cash every week to the agent, usually for a year.
Completion: You get a statement or receipt once the loan is fully repaid.

Real Example: The Cost of Home Credit

Let’s say you borrow £300 from a doorstep lender:

Loan Amount	Weekly Payment	Term	Total Repayment	Interest Cost	APR
£300	£15	52 weeks	£780	£480	~299%

This means you’re paying back more than double what you borrowed.

The Hidden Risks of Home Credit

1. Exorbitant Interest Rates

Most doorstep lenders charge APR rates from 200% to 1,000%, far above traditional credit cards or even payday loans.

2. Debt Traps and Repeat Borrowing

Due to the ease of access, borrowers often take out new loans to repay old ones, creating a dangerous cycle of debt.

3. Invasion of Privacy

Agents visiting your home weekly can feel invasive, especially if you’re late on payments.

4. Pressure Selling

Some agents may persuade you to borrow more than you originally needed, increasing your debt risk.

Doorstep Lending and Regulation

The UK’s Financial Conduct Authority (FCA) regulates home credit. However, the rules allow very high interest as long as terms are disclosed.

Consumers should check if the lender is listed in the FCA Register.

Better Alternatives to Doorstep Loans

There are several low-cost, safer borrowing options available, even for people with poor credit:

1. Credit Unions

Credit unions offer loans at much lower interest rates and have a community-first approach. Learn more in our guide:
What are the top home loan collection [doorstep lenders] in the UK