Doorstep loans, or Home Credit, are an advantageous choice for many people who require financial help to pay a bill or when purchasing a new household item. Furthermore, it goes without saying that both the borrower and lender need to act responsibly to avoid any problems with our home credit service. We are keen to dispel misconceptions about Home Credit. For example many of our customers have bank accounts but choose to use our services because of our financial agents’ excellent understanding of their problems. To find out more about our home credit solutions, please contact our team in Fishponds, Bristol.
The Home Credit Industry is labelled negatively by many people because of the misconceptions that have been attached to it. However, what these people do not consider is that, if used correctly, credit benefits the borrower and lender and the economy as a whole.
At Bristol Finance, we understand what a valuable service Home Credit is to our customers and therefore we are a huge supporter of it. We know that our customers are intelligent enough to know whether or not it is a suitable option for them. Our advisers also go to great lengths to implement excellent business standards in our company.
Too often, people who don’t even use our service mistakenly associate doorstep loans with negative images such as baseball bats and menace. However, the reality could not be further from the truth. Our agents tend to be mature women, working part-time, who assist our customers with all sorts of day-to-day problems, not just financial ones. They are considered to be the customer's friend, and it is thanks to the experience and quality of our agents that we are able to provide a valuable service which our customers repeatedly recognise, not only by transacting further business but also in recommending friends and family to transact business as well.
"Home Credit businesses encourage people to get into debt they cannot afford".
This statement is false. We are a business and bad debt reduces profit. When you first make a credit application, a member of our team will conduct a consultation with you in your home and ask to see proof that you will be able to make your repayments. This allows us to identify whether this is a suitable option for you and prevents you from accruing problem debt
Our advisers conduct more checks than many other credit companies who too often provide large amounts of credit without any proof of income. In a recent report issued by the National Debtline, the number of clients experiencing problems with home credit accounts was so small that it did not merit listing.
"Home Credit is extortionate.”
This is another inaccurate statement as we do not charge excessive rates. We do not deny that it may be cheaper to borrow from the bank, but it is illogical to compare High Street credit charges to home credit charges. The reason for our higher charge is because we visit your property every week. If a bank manager did this, they would charge extra too. A good analogy to represent this statement is a milkman who also offers a doorstep service - the cost of milk which is delivered to the home is considerably higher than it would be in a supermarket. Another comparison could be the difference in price between a bottle of lager in a supermarket or in the pub - twice as much, the explanation being that you are paying for a more personal service.
"Home Credit company loans carry enormous interest charges”
APRs are an inadequate way to compare charges. APRs do not work on accounts which are less than 12-month durations. The most important thing to consider is the TOTAL cost of the credit - including setup fees, default charges, arrangement costs, payment protection charges, life cover and all the other 'add-ons' that other sectors charge. An APR of 300% DOES NOT MEAN that the customer will repay 3 times the amount of the loan!
"Home Credit companies confuse customers with hidden charges."
At Bristol Finance, we pride ourselves on being a trusted company and we always ensure that all customers understand our charges before providing home credit. Banks charge ongoing fees, arrangement fees, default fees and letter fees, all without leaving the comfort of their office! Our customers realise that they are getting value for money - 94% of customers say they find their agent helpful and friendly.
"Home Credit companies 'trap' people into a 'circle of debt'".
"It is impossible for customers in difficulties to pay off their debts".
As a reputable company, we do not perpetuate your financial difficulty by adding never-ending default interests. If we believe that you are genuinely struggling, we may be able to renegotiate your agreement account over an extended period with no penalties being added.
The special agent/customer relationship allows us to work with customers to sort out any problems without adding extra charges which make things worse. We know every one of our customers by name - it's a relationship that other lenders can only dream of!
"Home Credit companies don't even care if the customers can't pay - they just take their house!"
For your peace of mind, we do not repossess people’s houses. All our accounts are unsecured, meaning that we take the risk. Can the same be said of our competitors? Another reason why we cannot be accused of 'forcing people into debt' or 'preying on the weak'.
"Home Credit companies only exist because the customers have nowhere else to go!”
As a company, we disagree with this statement. Nearly all our customers have access to another form of credit. In fact, 62% have a bank account but still choose to use our services. When asked why they chose our company, 90% of customers said it was because of our outstanding service, and 86% said it was because our advisers had a fantastic understanding of their problems. Therefore, this shows that people are choosing our services over other options available on the market because of the bespoke and hassle-free solution we provide. People use our services for various reasons, it may be because they want to treat themselves to a holiday, buy a new household item or to pay an unexpected bill, whatever the reason, all customers receive the same high level of service from our agents.
"Home Credit companies prey on the vulnerable”
Those who are most vocal in attacking our industry are often from a money advice background, who to be fair see the worst effects of credit on those in financial difficulty. However Nick Pearson, National Money Advice Co-ordinator, Federation of Information and Advice Centres (now AdviceUK), spent time with an agent and reported back as follows
Many of the customers were clearly not poor and in many cases, could probably have got a loan from a bank. It was clear that they appreciated the personal service offered - the loan when you needed it with no fuss'
'(Home collected credit companies) success is all down to staff working at a local level who are well-known, trusted and valued by the people they lend to and collect from. This is nothing new; in 1994 the Policy Studies Institute published 'Moneylenders and their Customers' which made much the same discovery.'
'The idea that the social fund could replace home collected credit is laughable - I can't imagine any Government Department being able to organise a service which met the needs of people ..… so -effectively.'
'Credit Unions may be a good idea for some but until they can match home collected credit in terms of speed or service, convenience … they will remain a total irrelevance.'