6 Reasons to use Direct Payday Lenders rather than Loan Brokers

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When you apply for a payday loan online you will either be on direct payday lenders site or that of a loan broker.

As the name suggests the lender is just that, they have the money and will ultimately be the one who lends it to you. A loan broker on the other hand does not lend money, they simply bring potential borrowers and lenders together. It was not always easy to identify whether a website is a broker or lender, but more recently the regulator has introduced rules that make this much clearer. Below are 6 reasons why it is better only applying to lenders.

  1. When you apply for your loan directly with a payday lender you get to shop around for the best deal that will work for you and cost you the least amount overall. Many brokers, or ‘lead generators’ as they are known in the industry, will not base their decision of who to offer your application to on this but instead chose the lender (or another broker) who will offer them the highest commission.
  2. As the lenders that brokers pass their leads to all offer different deals the brokers cannot really give you much information on their website to what the actual loan you are applying for will look like.  Normally on a lenders site the examples are more indicative of the deal you will get.
  3. When you research the lenders site, if you have any questions about the loan there is normally a customer service number to call. You can then clear up any issues before you apply. Many broker sites do not offer such a service and those that do cannot answer loan specific questions as they do not know who the lender is until you apply.
  4. While many brokers now no longer charge a fee there are still some that do. Why pay a fee when you can go to the lender directly and save the money.
  5. Your credit score is important to you, of at least it should be. When you apply with direct payday lenders they will normally make 1 search of your credit file. If you do not take the loan and apply elsewhere, the second lender will see just one previous search. If you apply to a broker, nearly every lender you are offered to will conduct a search of your credit file. This means that from one application you could get ten credit searches. Any lender who you apply to after this will have to question why ten others have looked at your application and decided ‘no’.
  6. Above all, it’s about building a relationship. Find a lender you can trust, research their history, good and bad, using the forums and feedback, when you are happy with what they offer you can apply and hopefully get your loan, thereby embarking on a relationship that will last.