Direct Lenders of Payday Loans

When it comes to obtaining a small sum of money as a loan, the internet houses plenty of different options for consumers. Whilst short term borrowing is still one of the newest forms of borrowing money compared to some of the longer standing financial aids, the ability to borrow online has now been available for longer than we might think; it’s over a decade in fact. This means that over the years the market has been able to evolve and only ever improve in turns of the service which is offered to consumers. Within the online market for what are commonly known as payday loans, exists two different type of lenders and then several different lending models. The lenders in question can be divided into the direct lenders and then the loan brokers and furthermore, there are several different lending styles, whether that be the classic payday loan or the newer model; the instalment loan. Over the years it has become increasing clear that those who operate in this vast borrowing market want to be able to satisfy for the short term borrowing needs of all, which is why such variation exists. So why is it then that there are two different type of lenders thanks to direct lenders and the loan brokers and how do the different type of loans they offer really work nowadays? Today we will aim to find this out.

Direct Lenders of Payday Loans

First of all the different products, both of which are offered by direct lenders and loan brokers alike. The product most commonly known within this market is probably the payday loan. The payday loan, like its name suggests, allows applicants the ability to apply for a small loan which is then repaid on your employment pay date. The payday loan therefore is a very short term manner for borrowing money. Whether the applicants pay date is 5 days away or 25 days, the product is specifically designed to be repaid as a single repayment. The second and more recent product offering is that of the instalment loan. The instalment loan allows the ability to borrow a small sum of money but instead of asking that a lump sum repayment be made, it gives applicants the ability to repay over a number of pre-agreed monthly instalments. Generally, instalment loans are considered to be the more flexible and customer friendly option but for some the payday loan is perfectly suitable.

Next then, the difference between direct lenders and loan brokers. The reality is the difference is very simple. Direct lenders will consider and either approve or decline applications directly and therefore ‘in-house’. Loan brokers on the other hand act as a loan finder, they will consider the application and then propose a potentially suitable lender, based on their existing relationships with them. So where a loan broker may reduce time in shopping around, a direct lender will mean a direct and final decision. Some brokers will charge a fee for their service, regardless of the outcome whereas direct lenders typically do not.