Do you find it difficult to decide if you should borrow from a direct lender or a broker? It means that difference between the both is not clear to you. Both of them can play a role in your borrowing journey.
Please note that their role is going to be different. You can take out money directly from a direct lender. In the case of a broker, you will get multiple options for lenders.
The decision of choice is subjective. For someone, approaching a lender would be viable. On the flip side, you might also want to get a loan via brokers.
For loans like very bad credit loans with no guarantor, a direct lender is a right choice. You can receive loan help directly without going through a mediator.
However, there may be a different set of loan alternatives available through brokers. All you need is clarity on your requirement and which way you should go.
Understand the difference between the both to make a sound financial decision. Terms and conditions will vary when it comes to borrowing from a direct lender and broker.
To learn more about the difference, you can take a tour of this blog.
Who is a direct lender?
They are loan providers. Upon approval, you can directly obtain money from them. As a loan applicant, you can send out your loan request directly to them.
At times, borrowing online loans with no guarantor from a direct lender proves beneficial. You can not only save time but also get relief from fulfilling the guarantor’s condition.
When you deal with a direct lender, you will see money deposited on the same day. No intermediaries will be involved in this process.
Who is a broker?
They work with different types of lenders. Therefore, they will introduce you to different lenders when you approach them for loans. In this case, you will not work directly with the lender.
It is evident that the borrowing process will extend. You will have to wait longer to get money in your account. However, the best part is that you do not have to search individually.
You can compare lenders using one platform. It is not going to be a manual and tiring process for you. One thing you must note is that the cost will increase due to the involvement of mediator fees.
There is no need for you to pay separately. You will make this payment with other fees. It is good practice to cross-check the fees before making an application for loans.
It lets you ensure that the loan price is within your budget. Fees will differ from broker to broker. Therefore, validating will keep you on the safe side.
What happens when you borrow from a direct lender?
If you want to fetch short-term loans with no guarantor, you can straightaway communicate your need to the lender. There, you need not have to worry about the confirmation process. Since you apply with a lender, you can get immediate confirmation regarding the guarantor requirement.
It is the most significant advantage of opting for a lender. You will send the loan application to the lender directly. For this reason, you can expect a quick reply from them also.
Since a lender is a concerned person, layovers are not huge. You will have to go through an affordability assessment when you apply with a lender.
It is a pivotal procedure as it helps the lender to understand if you can pay for loan repayment. On top of this, you do not pay extra brokerage fees.
You must go through the lender’s terms and conditions. Different lenders might have different conditions. By applying with a direct lender, it is better to be aware of the requisites you need to fulfill.
What happens when you apply for loans with a broker?
You cannot think of getting a decision from the lender directly. The broker will forward your applications to different lenders. Finally, they will match you with the right lender.
It could become a time-consuming process for you. However, you can save the time you will invest in searching for the right lender. The broker will complete this task for you.
In return, you will have to pay them some fees in the form of a commission. The broker is the intermediary who will set a connection between you and the lender.
You can take advantage of the advanced skill of the broker, who happens to know more than you. After all, the best deal is what everyone wants to catch at the time of borrowing.
Not all brokers are legitimate. You have to authenticate who is the best option for you. There is no harm in performing a deep analysis.
Whom should you approach for loans?
It is your preference what should matter the most. If you are comfortable with a broker, there is no problem. You can even go for the direct lender if requirements and conditions permit you to do so.
If you aim to save time and money, reaching out to a direct lender seems convenient. Nevertheless, you will have to allot time for research and comparison.
You can cut short this step by applying for a broker. You cannot save the commission fees in this case. You cannot convey your message directly to the lender.
The most essential facet is if the loan amount is right and rates are affordable.
The bottom line
You can search for a direct lender in the UK when you feel the need to borrow money. At the same time, you can look for brokers. It helps you understand if you should get in touch with a lender or a broker to borrow money.
Having confusion at the time of making a borrowing decision is common. You must draw a comparison between the two before making the final decision.
It will guide you to acknowledge the pros and cons of both sides. The decision should be on you. Do not compare your situation or decision with another person!
You must think individually. Above all, you can use the know-how gathered from this blog.
Jessica Rodz is the Senior Content Writer at Cashfacts. She has a long career in the field of content writing and editing. Jessica has the expertise in the UK lending marketplace where she has worked with 7 different lending organisations and acquired many responsibilities from preparing loan deals and writing blogs for their websites.
At Cashfacts, Jessica is managing a team of experienced loan experts and doing a major contribution in guiding the loan seekers via well-researched blogs. She has done graduation in Business (Finance) and now currently doing research papers on the UK financial sector.
