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Tackling your debts

What can I do about my doorstep loans?

Posted 07 November 2015

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Having doorstep loans that you can’t pay can be very stressful. Read on to find out what you can do.

Do you have a doorstep loan that you’re struggling to repay? No one likes the feeling of debt hanging around their neck, but it can be a whole lot worse if you know that someone will come knocking on your door to collect what you owe.

Even if you’re dealing with this type of debt there are things that you can do to combat the situation and try to stop the interest building and building over time.

 

If you can’t pay it back…

If you can’t pay the loan back, it’s really important that you get in touch with your lender and tell them rather than just missing payments without any explanation.

You may find that your lenders(s) are more understanding than you think and are willing to change your payments to help you. It may be possible for them to lower the payments for a time, freeze interest and charges, or even give you a payment holiday (a break to sort things out).

If you’re very uncomfortable with the way that you’re being spoken to or you feel like you’re being harassed, then you should check that they are authorised to be lending. Doorstep lenders are not the same thing as loan sharks, however it’s always worth checking that they are operating properly in terms of how they are chasing you for the money. If you’ve experienced any sort of threatening behaviour then you should report them immediately to the Police.

All financial firms are supposed to be regulated by the Financial Conduct Authority and they have a list of companies that are regulated - and a list of unauthorised firms. If you didn’t see any paperwork to do with the loan you took out, or they don’t seem to be sticking to what they say they will, it could be worth checking that they are properly authorised.

 

An expensive way to borrow

If you’re having trouble paying one of these loans then the worst thing you can do is take another one out and try to pay the first loan back with this. If you couldn’t pay the first one back then chances are you won’t be able to pay the second one either. Doorstep loans normally come with a higher rate of interest and can be quite an expensive way of borrowing, so simply taking another one probably isn’t going to help at all.

 

Debt Solutions

After you’ve spoken to your lender you’ll have a better idea of what you need to do next. If they give you the option of reduced payments or a payment holiday and you think that you’ll be able to get back on track just with this break, great!

However, if after looking at your finances you see that no matter what you do you’re not going to be able to pay it back, or they simply aren’t willing to be flexible, then you may need to consider a debt solution.

Going on a debt solution like a Debt Management Plan, Individual Voluntary Arrangement or Debt Relief Order (other solutions are available for Scottish residents) can mean that you get the chance to address your money problems in a sensible, organised and affordable way. If you know you can’t pay, it’s always a good idea to get professional advice about solutions and this way you should be able to avoid the creditors taking you to court to recover the money.

 

No one should be left to battle unmanageable debt by themselves – that’s what we’re here for. So if you want someone to talk you through the options then all you have to do is pick up the phone and one of our advisors will help.

by Christine Walsh

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.