We have observed that web searches for "Direct Lenders Only" are continuously raising high and high. We have tried to analyze reason behind this. Points-wise can summarize as:-
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 require 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 weather he goes with direct lender's website or through brokers online lenders search portal.
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.
Customer may negotiate for cheap loans with direct lenderBorrower 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.
He may get credit check waived Customer 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.
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 borrowers suitability of loan and passing the affordability check, loan approval have no link with mode of application.
Now question arise that, why so many brokers are working in payday market?
and What is their relevance in this field?
Answer is yes, brokers are also doing the wonderful job in loan awareness and helping loan seekers by suggesting payday loan alternatives. Brokers online loan search websites are free of charge, so applicant can try with as many websites as he wish to gather the loan quotes from different lender. Now this will update his understanding of loan market and he will be in good position to take final call on his credit. The best part of the story is this is free of cost.
Representative Example: Borrow £250 for 90 days. Total amount repayable is £411.63 in 3 monthly instalments of £137.21. Fixed interest rate of 292% per year. 1272% APR Representative.