In UK, payday loans are gaining popularity day by day. Payday loans brings fast cash relief to a person trapped in cash crunch, few days prior to his payday. But he wanted to be funded from direct lenders so that he can negotiate directly without and brokers, in this way he will be able to get cheap loans. Other reason for Payday Loans UK direct lenders search may be of fast loan approvals with direct lenders.
Some borrowers may think that payday loans are ultimately funded and approved by direct lenders only, so route to reach them hardly matters. With brokers approach he may get chance to compare among the direct lenders and option to choose the best for you.
Borrowers psychology behind funding from lenders directly
It is observed that web searches for “Payday Loans Direct Lenders Only” are continuously raising high and high. We have tried to analyze reason behind this. Points-wise can summarize as:-
1. With Direct Lender Loan approvals may be fast
Loan applicant think that applying directly with lender will save their time, which is crucial in urgent need of fund. For example if fund is required for medical purpose or car breakdown, then waiting time will be frustrating.
Borrower’s above logic may be partial true, particularly for repeated borrowers of direct lender. As in this case lender already knows his client well and many have his personal details in his database, so processing will be fast. For new and first time costumer, direct lender will be required same details as he requires with broker’s referred customer. The loan form submission time will be the same for both via online mode. Borrower have to fill similar online form whether he goes with direct lender’s website or through brokers online lenders search portal.
2. Brokers may charge commission as upfront charges
Borrower thinks that if he use broker’s online lender search platform, they may charge additional fees for their services. This also be true in some cases, but in general broker’s customer introduction online web portal is free to use. As brokers are paid for loan leads generation by direct lenders only, so they do not charge the customer.
3. Customer may negotiate for cheap loans with direct lender
Borrower think if they bypass the broker and final the deal with direct lender, they have better chance to negotiate for cheap loan. This is also partial true, because if borrower directly approaches to lender, then the middleman ‘broker’ will be eliminated. Now the lender get advantage of free loan lead and have nothing to pay to broker, so he may share some revenue with borrower by giving suitable terms.
4. Direct lenders approve no credit check loans
Customers may think that their direct interaction with lender may help in credit check waiver This is not true. As per FCA directions, lenders have to perform credit check on every loan processing without any fail, to ensure borrowers loan suitability and affordability.
Payday loans are unsecured loans and based on borrowers salary and past credit history. Concept of Payday Loans direct lenders no credit check does not a realistic one. Because lenders are doing their business to earn profit and not doing any social work. Their first objective will be to insure their principal amount then interest income. For bad credit borrowers they take extra care and compulsorily perform credit check to see borrowers past credit history. For past loan defaulters they may not willing to fund and if they agree may charge higher interest.
5. Easy to get bad credit loans
For bad credit score person, direct lender funding is the best, because he can directly communicate and assure the lender about timely repayment of loan. With lender, he can bargain for lower interest rates, as for poor credit score normally lender charges high rates. Credit score of borrower is only one factor in loan approval process. Lender’s loan underwriter check many details of loan seekers and prepare his own ratings. Borrower’s current income, residential accommodation status (owned or rented), outstanding credit card bill, he owned a car etc are other factors which plays vital role in loan decisions. So chances of bad credit payday loan approval is still bright if borrowers present financial status like employment, salary and saving are in good shape. Credit score of the borrower plays a vital loan in loan approval process.
Payday Loans from direct lenders with bad credit is hard to get but not impossible. Some lenders may agree for funding if borrowers present financial position is well, and he can repay the loan. The suitability and affordability of borrower is must as per FCA regulation, without satisfying this lender can not approve any loan.
For bad credit loan, direct lender may charge higher interest and offer short repayment term to compensate them that of bad credit.
6. He may get high acceptance loans
Borrowers think that apply with direct lender will increase the loan acceptance chances. This is not true. The loan approval depends fully on borrower’s suitability of loan and passing the affordability check, loan approval have no link with mode of application.
When you are in search of fast and reasonable payday loans to solve your temporary cash crunch, the loan with direct lender is the only way. Funding through brokers may delay the loan processing, because broker will pass your application to those lenders only who will pay him the highest commission. The commission of broker will be additional burden on the lender, that he will pass to borrower only. If borrower bypass the broker and contact lender directly, it will save lender’s expenses of broker’s commission, so lender may pass part of this savings to borrower as decrease the interest rate.