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When it comes to borrowing money, one of the things that you may think of is if the loan provider is a direct lender or a broker, and it’s a question that we get asked a lot here at Moneyline.
In this month’s MoneyTalk blog, we will explain the differences between a direct lender and a broker and what the advantages and disadvantages are to both.
It’s pretty much what it says it is – a company that will loan the money directly to you. It’s often a simple process where you apply for a loan directly with the company either via their website or a phone call, and if they approve your application, will pay the money directly to you usually the same day.
A broker is a someone that will look for a loan for you and act as a middleman between you and the loan company. They will usually ask you for some personal details, and then they will search a database of potential loan companies. A broker will try and set you up with the best loan deal that suits you and your circumstances.
The biggest advantage to using a direct lender is the process is often quicker than if you were to go through a broker. You are also in control of who sees and uses your personal details. A broker will have to submit your details to many companies to make sure you get the best deal.
You’ll also be able to contact your lender with any questions or issues you may have, and they will be able to help you, without having to use the ‘middleman’.
If you have bad credit or aren’t sure what loan options are available to you, a broker can help narrow down the search and find you the right solution. They can avoid the companies that may reject your application and advise you on the right loan.
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