What Is a Payday Loan Direct Lender?
A payday loan direct lender is a lender offering payday loans without any intermediaries involved. The lender deals with the borrower directly, officiating the whole borrowing process, including the application, disbursement, and repayment of the loans.
These lenders may be banks or other monetary organizations. Some of these lenders may be private entities offering loans to anyone in need and mostly operate online. Like brokers, taking loans with direct loans has its merits and demerits that you should familiarize yourself with to avoid any risks.
How to Choose Direct Lenders
There are tons of direct lenders in the market today, others legit and some fraudulent. Therefore, you need to be very diligent with your selection to ensure you pick one that's legitimate and matches your needs.
Here are six essential factors to keep in mind to ensure you select the most appropriate direct lender:
1. Types of loans offered
Direct lenders can offer different types of loans, from mortgages to personal loans, title loans, credit card advances, payday loans, and more. It’s best to confirm if the lender or your choice offers the loan type you need.
2. Your needs
You should take out a loan with a direct lender offering loan amounts and terms that favor you. Therefore it's critical first to analyze why you need the loan to avoid procuring the wrong loan types or taking one for the wrong reasons.
3. Lenders’ credibility
Knowing a lender’s credibility is one of the most crucial aspects to look at when taking out a loan. You should check the lender's reliability by confirming their address terms, social media presence, and website to see if they’re legit and licensed. Reading clients' reviews and testimonials is another great way to confirm whether a lender is trustable.
4. Interest rates
Direct lenders usually provide varying interest rates for their loans. It's essential to check their available interest rates to determine the amount you'll eventually pay for the loan you plan to take. It’s advisable to confirm the rate you’re given as an individual rather than the one posted on their websites, then compare several lenders to find one with the fairest or most affordable rates.
5. Application process
It's good to choose a lender with a streamlined application process. The best option is online lenders as they eliminate the struggle of paperwork applications and offer high convenience. The application process and documents needed may vary with the type of loan you want, but most lenders have simplified these processes to be more seamless and less time-consuming.
6. Payment options
An excellent direct lender will offer you flexible payment options for the loan you obtain. Depending on the loan amount and loan type, it can be weekly, daily, or monthly payment plans. Best lenders will even simplify this process further by setting up automatic payments.
Differences Between Direct Lenders and Brokers
Direct lenders provide loans directly to borrowers without involving a third party. On the other hand, brokers are the intermediaries involved when borrowing money.
Brokers usually run borrowers’ information on their systems to match them with the most suitable lender from their direct lenders' network. They will help you get a lender(s) matching your needs or financial situation but give you the liberty to decide if you want to take a loan with the creditors or not.
The brokers' main aim is to help you avoid wasting time applying for loans you can't get. With their broad lenders' network, they can get you a creditor for any loan type, whether long-term loans or short-term loans.
They also handle the communication process between lenders and borrowers during the loan application process. Good brokers should provide borrowers with valuable information to help them make more informed decisions during the borrowing process.
Brokers can also help borrowers who usually struggle to get approval for direct lender loans to borrow money regardless of their situation, such as unsteady employment, poor credit, or current bankruptcy.
So basically, brokers are a one-stop-shop for all loan types, removing the need to go to multiple lenders looking for the best rates and faster approvals.
How Does WeLoans Compare?
|Why Use Us?|
|How much am I allowed to borrow?||Up to $35,000||No hidden fees or charges|
|What are typically the loan terms?||Up to 36 months||Various repayment options|
|Do lenders check my credit?||Yes||Soft search only|
|Do lenders take bad credit?||Yes||Bad credit considered|
|Chances of approval||Good||Quick turnaround|
|How to apply?||Apply online||No paperwork needed|
Do Direct Lenders Give Bad Credit Loans?
Yes. Some direct lenders can provide loans to individuals with poor credit scores. The creditworthiness, terms, and rates for these loans may vary with each lender and the loan type or amount you’re borrowing.
The chances of getting approved for these loans are usually high as long as you meet the eligibility requirements. Direct lenders giving poor credit loans will quickly send you the offers they have if you qualify.
You can choose an array of loan products, including online payday loans, title loans, same-day loans, instant loans, etc. Making multiple loan applications can help you get a 2nd chance when trying to get a loan with poor credit.
Do Lenders Perform Credit Checks?
Yes, a lender will conduct either a hard or soft credit check to determine your creditworthiness for a loan. Usually, most lenders conduct soft credit checks and primarily consider other eligibility requirements to see if you're fit for a loan.
For example, lenders may check if you’re over 18 years old, have a valid address, regular income, bank or debit card account, and an active phone number. Most payday loans direct lenders for bad credit will only consider these requirements and your current ability to repay a loan, not your score.
Even so, soft checks don’t usually affect the credit score that much, making it easy to get a loan regardless of your history.