Third-party lenders have become popular in recent times. Most businesses create platforms where they can engage the services of lenders. With this, they get a pool of lenders who are willing to offer funds to people who apply through that platform. Hence, the borrower will apply for the loan.
The pool of lenders will review the loan request before making their offers to the borrower who will then choose the lender he or she wants to work with. Although this method allows the borrower to choose from several loan packages, it comes with its disadvantages.
A direct lender is a lender who offers the loan directly without involving any third party. Direct lenders deal with you from the start to the end of the loan application. The money they will be using to fund the loan you are requesting for is from their coffers and not that of a third party.
There are several direct lenders. There are payday loan direct lenders. With these lenders, you can apply for your payday loan directly and they will review your application, if you qualify, they will disburse the cash to your account. There are also installment loan direct lenders who follow the same process.
Banks are also direct lenders since they fund the loans with their own cash. However, they have complex application processes, unlike online direct lenders.
Since you are dealing with one lender, he or she will share all the information you need. Usually, third-party lenders cannot be straightforward because they are dealing with several lenders at the same time. They cannot put up the terms and conditions of each lender. So they end up sharing only general information. You do not get any information that is peculiar to one lender. The case is different with a direct lender, they will tell you all about the rates, fees, loan terms, terms, and conditions.
The entire application process is streamlined since the application only follows one channel. Once you complete the application, the lender will review and you will get the results of the application. You do not need to apply through a third-party and then wait for a response from the lender who will in turn revert with an approval or rejection. You will also not go through the long process of waiting for loan offers and then reviewing them before making a choice.
When you apply through third-party sites, you will be sharing your information with several lenders. Although these lenders do not share information with other people it is safer if you are sharing your information with only one lender. This is because identity theft is common these days and sharing your information with several companies increases the risk of theft.
You will be paying lower fees since you are applying directly to the lender. Some third parties charge broker fees which increase the loan rates. With a direct lender, you do not need to worry about that.
Direct lenders have their contact information on their websites. You can interact with the lender before you apply for the loan. With third-party lenders, the customer service is not dedicated to one particular lender.
Direct lenders offer several loan options. They have loans designed for people with bad credit as well. You can opt for both long term and short-term loans based on what you need to use the loan for. You should, however, remember that when you use a short-term loan for long-term purposes, it becomes very expensive and you will end up paying more on the interest rate.
There are personal options for people who need a loan to deal an issue. You can use the loan for any purpose provided that it is legal in your state. You can use it to consolidate your loan, to make a huge purchase, deal with medical issues, and any other issue.
Installment loans are also available for people who want to pay off their loan in monthly installments. You will need to make monthly payments until you have paid off the loan. The monthly payments are calculated based on the loan amount, rate, and loan term. The lender makes sure that the monthly payment is manageable.
Direct lenders also offer payday loans for borrowers who need extra cash until the next payday. You can easily apply for this loan and the lender will give you the money by the next payday. With payday loans, the rates are usually high. Payday loans are mostly online and you do not need to go to the lender’s office to get the loan. The lender will deposit the cash in your account.
You can get a fast loan to deal with your urgent medical issues from a direct lender. Sometimes, you may need cash to urgently repair your car, pay a bill or deal with a situation you did not plan for. An emergency loan can help you out.
Although it is easier and faster to deal with a direct lender, you can easily compare options compared to third-party lending sites. You will still need to shop for rates when you apply to a direct lender. You should check the rates, amounts, and loan term from several loan options. You can then compare the package from other lenders before you proceed.
You should also remember to read the lender’s terms and conditions before you proceed with the loan. The terms and conditions will tell you exactly what you are getting yourself into.