Information for consumers

Getting the most out of your relationship with your home credit lender

What is home credit?

Home credit is very different and simple compared to other forms of lending. It meets the specific, high service level requirements of those with modest incomes. Customers choose home credit because it offers access to small, affordable amounts of credit with a repayment method that is transparent, low risk, convenient and flexible. 

Instead of impersonal websites or far-flung call centres, home credit is delivered by reputable businesses whose agents live and work in your community. This enables them to provide a more personal service, building up an understanding your needs and your circumstances so that you only ever borrow what you can afford to repay.

Home credit is ideal for small, affordable loans and has many benefits.  It is:

  • Transparent - you know exactly how much you will repay before you borrow the money
  • Low risk - CCA members will only ever lend you what you can afford to repay
  • Convenient - the money that you borrow is repaid in cash to the agent who calls at your house at an arranged time each week.
  • Flexible - if you experience financial difficulty, CCA members are flexible with repayments so that your situation gets better, not worse.

Regulation

Since 1st April 2014 every firm or individual offering consumer credit in the UK  is regulated by the Financial Conduct Authority (FCA) to ensure that high standards of conduct are maintained.   

All home credit providers must meet the FCA's stringent authorisation requirements in order to carry out any consumer credit activities.  The FCA also provides ongoing supervision to ensure fair treatment for consumers and enforcement, should any poor practices which may damage consumer interests be identified.  

Why borrow from a CCA member?

The CCA works closely with the FCA to ensure that our members are authorised to provide home credit services (or have obtained interim permission to do so).  Unfortunately there are firms in the UK and abroad which operate without FCA authorisation.  Borrowing from a CCA member will not only provide protection from these unauthorised firms but will also guarantee that you will get the best service possible.  

In addition to FCA regulation, all of our members must abide by the stringent regulations set out in the CCA’s Code of Practice.

Locally delivered, personal service

The majority of CCA members are well established businesses that have been around for years. As local providers who know and understand your community, they can often provide a higher level of personal service than other forms of credit that is delivered remotely.

Lenders offer a range of payment options.  These may include making direct monthly repayments through your bank account or by post. Many home credit customers find that the weekly collection of repayments from their home by an agent of the home credit company helps them to plan and manage their money.  Another benefit is that the agent can assist if you need to reschedule payments.

No risk of spiralling debt, late fees or penalty charges

With home credit, extra interest does not build up and each repayment brings down the amount you owe by the amount of the repayment. Also, home credit companies do not charge penalty fees for late or missed payments.

And rather than confusing APRs (Annualised Percentage Rates), for a home credit loan, there is a fixed, all-in charge for the credit, which is set out clearly in the contract, so you know exactly how much you have to pay back.

What is APR?

APR stands for Annualised Percentage Rate which, as the name suggests, describes the interest rate on a loan for a whole year. However, the headline APR is not necessarily a good guide to the total amount you will actually pay back on a home credit loan, as most home credit loans are are for shorter periods of time. Always ensure your home credit lender tells you the total cost of your loan including all charges so that you know exactly how much you will repay before you agree to borrow the money.

Why listen to the CCA?

The CCA is a popular source of advice for consumers on credit matters and we’re here to help you get the most out of your relationship with your home credit lender. 

Established in 1978, the CCA knows the home credit industry inside out. We are the leading trade organisation for home credit businesses and all of our members have to meet the exceptionally high standards of business practice set out in our Code of Practice. 

We work closely with the government and industry regulators to make sure our members always treat their customers fairly and in a responsible way. 

CCA News

CCA News - January 2015 cover

Our quarterly magazine, CCA News, keeps our members up to date with all the latest news and issues affecting the home credit industry.

Download CCA News