Every day, millions of consumers seek quick cash from direct payday loan lenders and brokers, yet very few actually examine which service is beneficial to their situation. While both services may seem pretty much alike and the end result is really the main focus, there are reasons to compare and then choose. For the most part, each party seeks to help the consumer obtain an easy loan, yet they each provide a different type of service.Applying directly with the source Direct loan lenders are the companies with the money. The consumer deals directly with the lender and at the end of the application and verification process, the consumer will receive the funds. Easy, simple, and takes about five minutes. Another benefit is time. When dealing directly with the lender, there is only one application to complete. Brokers may require multiple applications, based on the different lender criteria. You certainly spend a lot of wasted time completing the applications. Yet, even better, one of the primary unspoken benefits of dealing directly with lenders is the savings on the loan. Consumers are the ones who pay the brokers commission. For every new loan, the direct lender compensates the broker with a small percentage. This helps to accommodate the broker’s commission for bringing in business. It may seem that direct loans are the smart way to go, but brokers bring some beneficial options too. Using a loan broker While consumers can appreciate dealing one-on-one with the decision-maker, when a lender denies an application, it’s usually hunt and seek for the next lender. Brokers submit the initial application to several lenders, opening up many options for funding. It is definitely a time saving technique. Brokers also take the amount of funds requested, and match it up with lenders, willing to approve loans for that specific amount. This is an obvious downfall for many direct lenders. Consumers waste a lot of time applying for and requesting a specific loan amount. If denied, the hunt is on for yet another loan. This is definitely a plus for brokers. Which option is best? Every situation is different and determining which lender is best will depend on your circumstances. Many consumers won’t mind the additional fees because of the nature of their emergency. Brokers will distribute several applications, giving the consumer more opportunities for approval. This process is certainly streamlined. Then again, if the circumstances are not urgent, applying directly to lenders can save you money and secure the loan. Ultimately, choosing between direct cash loan providers will come down to the urgency and how quickly the lender approves the loan.
Representative example on a loan of £200 repaid after 30 days:
- Total charge for credit: £248
- Payable in one payment of: £248
- Interest: £48
- Interest rate: 292% p.a.
- Representative 1223.6% APR (variable)
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