Direct Payday Loan Lenders vs Brokers

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When choosing where to get your Loan, how do you go about it? What is the best way to find a Lender?

When considering direct payday loan lenders vs brokers, we sometimes hear that people prefer to make their Application for a loan with a Direct Lender (the actual Lender rather than an Introducer) and others tell us that they opt for Brokers to be their intermediaries in finding their loan.

Should I apply to the Lender who I want a loan from directly?

The advantages here are fairly straightforward; you are in communication with your preferred Lender and the process is simple: complete their application form, receive approval and your cash is quickly processed into your Bank Account.

However, how did you find your preferred Lender? By word of mouth, reputation, Media or your own research? If you know who you wish to apply to, then going direct is a great option.

What about using a Broker?

Quick payday loans online are plentiful and so this is a good option if you are looking for the best-value loan but unsure which Lender to apply to. A good Broker will do the research for you and provide you with a Lender that has shown an interest in providing a Loan to you following an application via the Broker.

Consider also that sometimes, you may just not be sure that your Credit History is going to allow for approval with a given Lender. In this case, using a Broker allows your Application to be presented to more than one Lender following the completion of a single Application; this saves you time and from the potential of being declined before you are approved.

The Broker will reveal only the Lender that wants to fund your loan.

What important things should I consider when using Lenders or Brokers?

For Lenders, we advise to always ensure that they meet the following conditions before accepting a loan:

  • The Lender must be Licensed and Regulated by the Financial Conduct Authority
  • Ideally, the Lender should be a Member of a Financial Services Trade Association; The CCTA, BCCA, CFA etc.
  • Check that the Lender does not charge more than 0.8% interest per day and that the maximum per £100 does not exceed £24.
  • Read the Lenders Treating Customer’s Fairly Policy and their Terms and Conditions.

For Brokers, we advise that they meet the following conditions before you apply with them:

  • The Broker must be Licensed and Regulated by the Financial Conduct Authority
  • Ideally, the Broker must be a Member of a Financial Services Trade Association; the CCTA, BCCA, CFA etc
  • The Broker should not charge a fee for their service. The best Brokers earn Commission from the Lender that provides your loan.

Are some Lenders, Brokers too?

Yes, some are. The benefit of this is that should the Lender be unable to offer you a loan directly, then they use the same Broker processes that independent Brokers use to find you an alternative Lender to fund your loan saving you the hassle of completing further forms elsewhere. 

Using a Broker, therefore, is not a bad choice. As we have described above, it is actually a good option if you are unsure of your borrowing status. Given that a good Broker is a 'free-to-you' Service, there is no actual risk for you to use them.

In the bad old days before Regulation, Broker's got a very bad reputation due to some charging an extortionate fee. Happily, that practice and those Brokers, no longer exist today. 

You can be confident that using a Service whereby multiple Lenders will see your Application will do no harm and can be a lot quicker in producing a Lender willing to meet your borrowing needs. 

The choice is ultimately yours

Which Lender you use and how you find that Lender is your decision. The above advice is not definitive and serves only to reflect our own recommendations about how Payday Lenders should be found and approached. Ultimately, you make the final decision.