What is a direct payday lender?
A direct lender sends approved funds directly to you, rather than to another financial institution to be applied to a purchase or other debt (either yours or that of the party from whom you are buying a property).
In other words, instead of the loan being applied somewhere else by the lender, it is put directly into your possession.
What are the pros of using a direct payday loan lender?
Brokers take a substantial amount of your personal data and pass it around to several companies in order to get quotes for loans on your behalf. If you use a direct lender, the data stays in their company only.
Perhaps the greatest advantage is that the money is 100% in your control. From the time it is handed over to you, all that matters to the lender is that agreed-upon payments are made according to schedule.
Key Benefits of Choosing a Direct Lender For Your Payday Loan
Payday loans may suit a borrower’s particular situation, but will carry higher fees in most cases when compared to direct lenders. Direct lenders may also offer longer terms of repayment; most payday loans are available to a maximum of one month, at which time rates can skyrocket, or credit adversely affected – or both.
Top tips to avoid using a broker by accident:
I broker will often take up-front fees, whereas a direct lender will only charge fees if a loan is approved.
Brokers are legally required to indicate that they are brokers, but this information can be hidden in small print or on obscure pages.
If you are in doubt – ask. The simple question “Are you a direct lender or a broker?” should elicit a simple answer, one or the other.
Direct Lenders if you have bad credit?
No direct lender should claim that there is 100% acceptance. Credit is often available, even with a poor credit rating, but not in every case.
Are payday loans from direct lenders regulated?
Yes. The Financial Conduct Authority oversees direct payday lenders. These regulations include caps on repayment to ensure that borrowers pay no more than double what they borrowed, including interest and fees. Interest, likewise, may not be more than 0.8% per day. This is still substantial however, at 292% annually.
Top Considerations for Choosing A Direct Payday Loan Lender
Consider the amount you will be paying for the money you get. Consider your ability to pay it back within the required time. Sometimes getting out of an immediate financial problem can cause a greater one in the future. Only borrow money when there is a reasonable path to paying it back on time.