Doorstep Loan
A doorstep loan (also called home credit) is a short-term loan collected in person at the borrower's home, usually in weekly cash instalments. The UK doorstep loan market has shrunk dramatically since the late 2010s as major lenders exited.
A borrower agrees to repay a £300 doorstep loan over 26 weeks at £15 a week. An agent visits each week to collect the payment, and the loan often has no fixed APR cap separate from the high-cost credit rules.
- Doorstep loans are expensive. The convenience of in-person collection comes with a high APR, often comparable to short-term credit elsewhere.
- The doorstep loan market in the UK has largely collapsed. Provident Personal Credit, the biggest provider for decades, closed home credit in 2021. Morses Club exited in 2022.
- Free debt advice is usually a more useful first step than a doorstep loan if money is tight, especially for essential bills.
Why it matters
Doorstep lending was once a significant part of the UK subprime credit market. Provident Personal Credit and Morses Club between them lent to millions of customers, most on low income or with damaged credit files. The model relied on weekly in-person collection, which built trust with borrowers but came at a high APR.
The market is much smaller now. Provident closed its home credit business in 2021. Morses Club followed in 2022. A handful of small regional doorstep lenders remain, but the choice is limited and the cost remains high.
For most borrowers, the practical implication is that doorstep credit is no longer a default option for short-term cash. The alternatives below are usually safer and cheaper.
Common confusion
People sometimes think of doorstep credit as friendlier or safer than other high-cost credit because of the personal contact. The personal contact does not change the cost of the credit. APRs on doorstep loans were historically high (often hundreds of percent), and the same affordability principles applied: a loan you cannot easily repay still puts pressure on the rest of your finances.
Some borrowers also believed doorstep loans did not affect their credit file. They typically did. The lender ran credit checks at application and reported payments and defaults to credit reference agencies.
Alternatives to consider
- Credit unions often lend in similar amounts at much lower rates (FCA caps credit union interest at 3% per month, or about 42.6% APR maximum)
- Salary advance schemes through some employers
- Local authority crisis funds or charity hardship grants
- Budgeting advance for Universal Credit claimants
- Free debt advice from StepChange, National Debtline, MoneyHelper or Citizens Advice if money is consistently tight