As you may have already heard, Provident Financial is closing its Home Credit loan business. But what does this mean for you if you currently have a Provident Home Credit loan? And is there an alternative to a Provident Home Credit loan?
In this article we will look at what you need to do if you have a Provident home credit loan or were hoping to apply for a loan from Provident.
Who is Provident?
Provident is a Bradford-based financial company, originally set up in 1880 to provide affordable lending to working class families in Yorkshire. Much of this has been through its Home Credit - or doorstep lending - business, which currently has around 380,000 customers.
Doorstep lending is based on a lender delivering a cash loan to the borrower’s home then visiting the borrower each week to collect their loan repayments.
Provident also has a credit card business Vanquis Bank, a car finance operation Moneybarn, and an online short-term loans business called Satsuma.
Why is Provident closing its Home Credit business?
The main reason that Provident’s Home Credit business is closing is due to a high volume of customer complaints. In particular, Provident has been accused of not carrying out appropriate affordability checks on borrowers before lending them money. This has caused people to fall into debt and suffer financial hardship.
Many of the complaints about Provident have been handled by claims management companies, and the volume of these complaints cost Provident £25 million in compensation in the second half of 2020.
What will happen if I already have a Provident Home Credit loan?
The situation is currently uncertain. What is likely to happen is that Provident will operate a 'collect out' plan, during which it will seek repayment of all outstanding loans.
This would most probably happen over a period of between 12 to 18 months. But if you currently have a Provident Home Credit loan, you will understandably be worried about whether you will be asked to repay the loan sooner than you expected.
Also, if you have been considering taking out a loan for any reason, you may be wondering whether there is an alternative to a Provident Home Credit loan.
Let’s take a look at both these situations.
What is the alternative to a Provident Home Credit loan?
If you are a current or potential Provident loan customer don’t panic. There is help out there, and there are alternative loans available.
At Fair Finance we offer financial products and services that are inclusive and fair for everyone. This includes affordable personal loans. Our loans are simple and accessible, and we will do our best to ensure that you get a fair deal, whatever your circumstances.
Many customers are worried about applying for a new loan if they have a low credit score or poor credit history. But at Fair Finance, we are interested in the present, not the past. We treat each case on its individual merit, not just on algorithms or credit scores.
As a responsible lender, we do need to make sure that the loan is affordable for you before lending you the money. But if we are confident that you will be able to afford the loan repayments, we will not let past credit issues be an obstacle.
So if you will be affected by the closure of Provident, and are looking for an alternative to a Provident Home Credit loan, do take a look at the affordable loans offered by Fair Finance, to see how we may be able to help.