Loans from Direct Lenders
Recently, payday loans have become more and more popular as they help solve urgent financial problems. In fact, everyone has at least once faced such situations as a broken car, a child’s illness, an accident. Unfortunately, most people do not have extra funds to solve these problems in one day, so they use the services of lenders. Most often, people are faced with the question of which lender is the best to turn to, traditional or direct?
What is the difference between a traditional lender and a direct lender?
A traditional lender takes money from a bank and gives it to you at interest. Thus, the lender is an intermediary between you and the bank, providing you with money and receiving interest for service. After a traditional lender gives your details to the bank, it can take days or even weeks for the bank to review your loan and make a decision.
A direct lender differs from a traditional lender in that he does not take money from the bank. The amount he lends you is his own. That is, you work with the lender directly, without banks and intermediaries. Working with one lender frees you from overpayments. What’s more, the direct lender will approve your loan application much faster as it doesn’t need to contact other companies to review your application.
What are the benefits of Loans from a Direct Lender?
- Safety. When traditional lenders do not have the funds to approve an application, they use the services of third parties, which have large resources. Thus, your information is available to more people. If you work directly with the lender, your personal data is not transferred to third parties, so you can not worry about the security of your personal information.
- Loan cost. Of course, with more parties involved, the cost of borrowing goes up. So, with a traditional lender, your interest rate on the loan will be higher. Also, direct loans have fixed interest rates or income-based repayment plans. This way, if the loan payments are based on your salary, it will be easier for you to repay the loan.
- Speed. Direct loans are quicker as they require fewer parties and less paperwork. Also, you don’t have to wait long for bank approval as direct lenders give you their own money. Thus, you can receive money even on the day of application.
- No overpayments. Since you work directly with the lender, you do not need to pay any additional interest on the loan to intermediaries. You will pay only the loan amount and interest on the loan, without additional fees.
Can I get a Loan from a Direct Lender with a bad credit history?
Credit history is a guarantee of your reliability. When lenders check it, they understand if they can give you a loan, or not. Thus, the better your credit rating is, the greater the chance of getting a loan with the lowest interest rate.
Borrowers with bad credit history can also apply for a loan. However, it should be understood that the interest rate on a loan for a bad rating can be very high. This will depend on how bad your credit history is and whether you have a steady source of income. If your credit history has started to improve lately and you have a regular job throughout the year, you can get a loan.