Looking closely at direct lenders

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Direct Lenders

Within the online market for borrowing money there are several different ways in which a loan can be borrowed and repaid. Short term loans online are designed to assist consumers in times when an unexpected or unplanned expense presents itself. This purpose is reflected in the product offering being small loans over pre-agreed periods of repayment. Consumers can select a product which is suitable to their individual circumstances, from the range of repayment terms offered through a good selection of lenders who exist. Given the loan values remain relatively small, compared to more traditional lending tools such as a Hire Purchase or Credit Card, these online loans may be suitable for a cost such as a broken washing machine or emergency vet bill. These costs are a good representation of an unplanned cost in respect that they are important and often require immediate attention but equally are not expected to occur each and every month. In many ways this is the key to effective borrowing for such loans, meaning it is important to ensure the purpose for borrowing is reflective of the product being offered.

The repayment terms offered by online lenders of this nature will vary in some degree from one resource to the next but typically flexibility is a key concern. As such it is common place to ensure repayments can be repaid over a number of terms, whether this be 3 month, 5 months or 6 months for example. This gives consumers an ability to ensure they select a repayment amount (and therefore term) which is affordable and crucially; sensible to their existing expenses. Lenders complete a series of both electronic and manual checks to assess the suitable of the loan requested and also the repayment term selected and will make an informed decision when deciding on the outcome of an individual’s application.

As well as a selection of different loan amounts and repayment terms, the online market for borrowing a small loan also has several different types of lenders. These lenders can effectively be split into two groups, being the direct lenders and then the loan brokers. Most consumers will have heard of these two types of lenders at some point or another. Direct lenders, as the name suggests, consider applications on a direct basis and brokers do not. Direct lenders will fully assess an application in order to deliver an ‘in-house’ decision, based on internal rules and Underwriting criteria. Unlike direct lenders a broker will act as a source for finding a potentially suitable lender, based on their own portfolio of lending partners. This means a broker will act in a similar manner to that of a comparison website. Typically when completing an application with a loan broker instead of direct lenders not all personal information will need to be provided at the initial stage and will later need to be provided at the source of the proposed lender instead. Whether as an individual the decision is to use direct lenders or a broker, there is plenty of choice and flexibility which exists within this online market for borrowing. 

Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk

Representative Example: Representative 1286.98% APR on a loan of £300.00 with 5 monthly repayments of £101.03 Total amount repayable £505.13 Annual interest rate (fixed) 290% Maximum APR 1351%

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Author: Internal Marketing Department