Beholden to the lender on the doorstep

Doorstep lenders tread a delicate path. On one hand, they provide credit to the type of borrower mainstream lenders have always tended to overlook, even during the heady days of sub-prime lending: people on benefits, who have no mortgage or assets, or with bad credit histories.

The lenders' armies of debt collectors make weekly visits to customers' homes, arranging small loans and collecting repayments. Loans are agreed face-to-face, and late penalties unheard of.

Doorstep lenders, enthusiasts argue, provide an important service for some of the poorest, and most overlooked, members of society.

Yet the price of that service is extraordinarily high. Despite Bank of England interest rates falling to a record low of 1pc, lenders routinely charge annual percentage rates well into three figures.

Source: Telegraph.co.uk