Direct Lenders of Short Term Loans

Direct lenders are often the preferred choice for customers looking for a short term loan. Direct lenders, as the name suggests, offer consumers the ability to apply for a small loan on a direct basis and it is for this reason primarily that consumers select them for their borrowing needs. Within the short term loans market there are a number of different ways of borrowing money and then a number of different lenders who offer the service. As well as the direct lenders there are also the loan brokers who also aim to offer the ability to obtain a loan. Unlike the direct lenders though brokers do not offer a direct service and instead deliver a different form of service to customers. Today we will be digging a bit deeper into these two different types of lenders to better understand the positives and negatives of each.

Direct Lenders of Short Term Loans

Firstly, lets learn in greater detail the manner in which direct lenders operate. A direct lender as mentioned above offers the service of applying for a loan with one specific company. In order to offer this service an applicant can expect to supply all information needed to make a definite lending decision. This means the application will gather all of your personal information as well as information linked to employment and bank information. For the application to be submitted a loan repayment term will also be selected and the agreement electronically signed. At this point the direct lender will review the application by both electronic and manual means and then make an informed decision as to whether the loan can go ahead and be approved. If approved the lender with whom the application was completed will deliver the loan to the supplied bank account. It is important to note here that whether direct lenders can approve the loan or not, they are extremely unlikely to charge a fee simply for applying. In cases where the application is declined, the applicant will then simply need to look elsewhere, starting the application process again.

Now let’s look at the loan brokers who fundamentally offer a similar product to that of direct lenders. A broker will need their applicants to complete an application online, in the same manner as direct lenders. There is a difference however in that loan brokers do not gather all the information to provide their service. This is because a brokers role is to attempt to locate a lender who may be able to help and this is done by ‘offering’ the applicant to their bank of lenders. Where the broker then has a lender who is prepared to consider the applicant further, there is a requirement to complete the remainder of the application with this proposed lender. At this point the brokers job is complete and the ultimate decision as to whether a loan can be granted or not is down to the proposed lender. So effectively brokers provide a service which reduces the need to shop around, however, unlike direct lenders, in most cases there is a fee payable for the service being provided by a broker.