What Are the Benefits of Using Direct Lenders for Installment Loans?

Do you need money? Are you considering borrowing an installment loan? Learn the benefits of using direct lenders.

Expenses don’t wait until you have the cash to cover them. That’s why people of all ages, income levels, and circumstances turn to personal loans. In fact, consumers today are using a total of $162 billion in personal loans.

Typewritten word "Direct Lenders" in ragged paper
Direct lending – lending without brokers.

If you need extra cash and you’re shopping for a lender, there are qualities you should look for. The first of those is finding a direct lender.

What Is a Direct Lender?

A direct lender is a lender that handles the full process of your loan. The same company takes your application, chooses how much to offer you, establishes the terms of the loan, and distributes the money to you. Then you make your installment payments to that same company.

You might be asking, “Isn’t that how all personal loans work?” Surprisingly, no. There are many companies that appear to be lenders, but they’re really third parties servicing loans for the actual lenders.

These third-party companies are called brokers. Many of the lending storefronts you see, like most payday loan offices, are brokers and not direct lenders. 

Benefits of Direct Lenders for Installment Loans

You now know to look for a direct lender when shopping for a personal loan, but why? What are the benefits of working with direct lenders for installment loans?

1. Convenient Application Process

People are busy and no one wants to go to a loan office during business hours, wait in line, and complete an application in person. After all, taking time out of your work schedule to get a loan could make your financial strain even worse.

Direct lenders are more likely to operate online. This means you can apply online at home at any time. There’s no need to rearrange your schedule, find transportation, and deal with the hassle. 

2. Knowing Who to Research

When you look for a lender, there’s a lot at stake. You don’t just need to trust the lender to handle your money properly. You need to trust them with your personal information like your social security number too.

If you’re working with a broker, you may not know the actual lender. That doesn’t give you the opportunity to research the lender and find out if they’re trustworthy.

Even if you do know who the lender is, you now have to research the lender and the broker. That’s twice the work for the same loan.

With a direct lender, you know what you’re getting and who you’re getting it from. There’s one lender to investigate and that’s it. 

3. Quick Answers

If you had weeks or months to get the money you needed, you’d probably be picking up extra shifts at work or selling things you don’t need. When people get personal loans, it’s often because they need the cash right away.

When you work with a direct lender, the process is quick and easy. You’ll often get an answer to your application in minutes. That’s because the same company is handling it all from start to finish.

With a broker, that’s not the case. You submit your application to the broker and they pass it on to the lender. The lender considers it and makes a decision. Then they have to inform the broker who lets you know the decision before you can get your loan.

All that back-and-forth costs you valuable time you could save with a direct lender. 

4. Protecting Your Privacy

Privacy is a critical concern today. Over 14 million Americans each year are victims of identity theft.

This an important factor for personal lending because the lender needs so much sensitive information on your application. With a direct lender, only one company is handling that data.

If you work with a broker, your risk increases. Not only do you have two companies handling your personal information, but they have to send that information back and forth. That means there are more opportunities for hackers to nab your data. 

5. More Transparency Throughout the Process

After you’ve applied for a loan, waiting for an answer is hard. You have bills to pay and the clock is ticking, and all you can do is wait.

Direct lenders offer more transparency throughout the process. Not only do you get a decision faster, but you can often watch the progress of your application. The lender has that information because they’re the ones processing the application and loan.

When a broker hands off your application to a third party, though, the curtains close. You don’t know how long the process will take, what stage your application is in, or anything else. It adds stress you could easily avoid.

6. Keeping It Simple

There isn’t a person among us who would say they wish their loan process was more complicated.

Working with a direct lender is simpler. You only have one application, one log-in account, one bill to pay, and so on. Everything stays on the same website.

This is especially true with installment loans. You’ll need to continue making payments for an extended period of time, so you don’t want to have different accounts or logins throughout the process.

How to Know If You’re Getting a Direct Lender

With all the advantages, it’s clear you want direct lenders for installment loans. How do you know if you’ve found one? Not all brokers clearly state they’re not the actual lenders.

Look for the words “direct lender” and if you aren’t sure, contact the lender to ask. It’s a simple question but it can make a powerful difference in your process, your privacy, and your finances.

To start your application with a direct lender today, apply with Jora Credit.

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