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About Doorstep Loans

Doorstep loans are a popular concept in the western countries. It is a type of unsecured loan wherein small sums of money can be borrowed without any collateral or guarantee. An agent makes cash available right at the doorstep of your house with minimal documentation. One need not approach a bank or a lending institution to borrow finance. This type of loan perfectly fits the need to meet immediate finance which is unforeseen. It is also useful when an individual does not want to go through the hassle of applying, having eligibility criteria checked and submit documents for small amounts of loan.

Currently, doorstep loans are not available in India. However, a closer concept of doorstep banking is offered by most of the leading banks in the country. When you apply for a loan, be it a home loan, car loan or any personal loan, bank representatives come to your home to explain the features of the loan and help in completing the documentation there itself. You do not have to go to the bank personally. This is a very convenient service available when everyone is hard-pressed for time.

This is a free of cost service offered by leading financial institutions. This type of service helps in making finance reachable to many parts of the country. Many banks offer other services like cheque/DD pick up, FD deposits, account opening right at the convenience of your home. Axis Bank, SBI, Bank of Baroda, HSBC, Deutsche Bank and HDFC Bank are some of the banks that provide this service in India.

Doorstep Loans
Doorstep Loans

Features of Doorstep Banking

Most of the leading Banks and financial services institutions offer doorstep banking. It is a customer-oriented service provided by the banks to win an edge over other plyers in the market. One can avail many banking services including loan applications in the comfort of one’s home. Some of the main features of doorstep banking are:

  • Banking services available at home vary from bank to bank. Most banks provide pick-up and drop of cash, instruments, demand drafts, cheques, account opening form, loan application completion, Life certificate pick up, KYC documents pick up etc.
  • India Post Payments Bank offers doorstep service which includes account opening, cash deposits, money transfers, recharge and bill payments, loans and insurance.
  • Doorstep banking is simple and secure.
  • Most banks offer this service free of cost.
  • It saves precious time of a customer for simple transactions.
  • One can avoid long queues at the bank to complete transactions.
  • It reduces the risk of carrying large amounts of cash to the bank.
  • Dedicated courier agency/agents are appointed by the banks to transfer important documents and cash.

Eligibility Criteria for Doorstep Banking

To be able to avail the service of doorstep banking, it is important to know the following criteria which is generic to most banks:

  • Possess a savings/current/operative account with the bank
  • Be a senior citizen of the age 70 years and above
  • Differently abled or special needs people can avail this service.
  • Some banks offer doorstep banking as a benefit to their top customers/premium account holders.
  • Should have completed KYC formalities with the bank
  • Should be above 18 years of age
  • Resident of India

Doorstep Banking – Loan Application Process

While doorstep loans are not available as a product in India, most leading banks offer loan products at the comfort of your home. One can reach out to the lender through phone or through online sources and a representative/agent will respond to you with further details. Normally, doorstep loans are managed by agents in a specific locality or area. They analyse your financial requirement and then deliver the required money. The tenure of the loan is to be mutually decided between the lender and borrower. Once a mutual understanding has been arrived at, the money is handed over and then the repayment amount is collected by the agent on a weekly basis. The whole process of getting a doorstep loan gets completed in 3 to 5 days’ time.

This is an informal type of loan. Some agents carry out informal credit check on your financial history and some only require a proof of your regular income or wages. Since the loan amounts are normally less as compared to the formal way of lending money from banks, the level of risk is manageable.

Self-employed, unemployed, debt-ridden individuals can request for a doorstep loan. The documents required are very minimal such as ID proof like driving license/passport, address proof and bank statement.

The interest rates chargeable on this type of loan is generally double the formal lending rate in the market. The loan interest rate is normally not negotiable as it is unsecure. If you are a regular customer of doorstep loans, there is a possibility of getting a better interest rate due to familiarity. This type of loan does not levy any late fee on skipped instalments or late payments. If your financial condition is not secure or you have a bad credit history, this loan can be helpful in meeting your immediate needs or to pay off debts.

Benefits of Doorstep Loans

Some of the benefits of doorstep loans are:

  • Quick money :
  • Since there is not much of documentation required and credit check is very superficial, it is very easy to get money out of this loan.

  • Credit check is not mandatory :
  • It depends from lender to lender whether credit checks are done. Since, it is not compulsory, one can get finance easily even if you are sitting on a pile of debt.

  • No late payment fees :
  • Even if the borrower forgets to pay one instalment, there is no late payment fee charged unlike the formal banking system.

  • Very convenient :
  • As the name of the loan suggests, the money is delivered right at your doorstep. There is no need to visit any financial establishment or wait in queues to get finance.

FAQs: Doorstep Loans

1. What are doorstep loans?

It is an unsecured type of loan that is available right at your doorstep. These types of loans attract a much higher rate of interest due to the risk involved in repayment. Special agents deliver cash and are responsible for collecting back the money on a weekly basis.

2. Which banks offer doorstep loans in India?

Currently, this concept has not yet taken off in India but is available in other countries in the world.

3. What facilities are available with doorstep banking in India?

Cash/Cheque/DD pick-up and drop, completion of loan application, insurance application, account opening, and KYC formality completion is offered as doorstep banking in our country.

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