If you wanted to take out a short term Loan, payday loan, bad credit loan or any other type of loan, chances are you’d go online and choose a loan company. But do you know who you’re talking to – is it a broker or a direct lender? What’s the difference?

Here we’ll find out what they both are, and we’ll look at which one’s best.

What’s a Broker?

When you apply for a loan through a broker, you’re giving your details to a middleman. It’s an extra step you take in your loan application process. Loan brokers don’t lend you the money themselves.

The way brokers operate is that they have a list of loan companies that they work with. They take your personal details and information about the loan you want. They then match you up with one of the lenders on their list that you’d be eligible to apply with.

If you go ahead with the lender they suggest, you then have to submit a full application with that lender. You won’t find out if your loan’s been approved until you’ve completed this next step with the lender.

What’s a Direct Lender?

With a direct lender, the loan application process is more straight forward. You only give your details and loan requirements to one lender. You apply directly with the company who’s going to lend you the money if approved. There’s no one else involved in your loan application process.

Which is Best – Broker or Direct Lender?

When you’re taking out a short term loan, you’ll want to know which is best – a direct lender, or a loan broker. Here, we can give you a few tips to help you decide.

• When you apply with a loan broker, your personal details are passed on from one company to another. Doing this adds an extra element of risk with how your information is shared. It also makes the application process longer.

When you apply with a direct lender, your information stays in one place. You can be safe in the knowledge that your personal details aren’t going to be shared with anyone else. You find out if you’re loan’s approved quicker too.

• Brokers can pass on your contact details to other third parties. This can lead to you being contacted by companies you haven’t applied for a loan with. Being badgered by companies trying to get you to apply with them can be overwhelming.

You wouldn’t have this problem with a direct lender, they won’t pass on your details on to any third parties. The only contact you’d have would be directly from them.

• Brokers can sometimes charge you a fee for their services. Any fee a broker charges you would be on top of any charges you have to pay on your loan.

With direct lenders, all their fees and charges are made clear before you submit your application. They tell you exactly how much your loan will cost upfront, without hiding anything from you.

• Brokers don’t know you as well as a direct lender would. This is because a broker only takes the information, they need to help them match you to a lender.

When you apply with a direct lender, they’re able to access more information about you. Especially if you’ve borrowed money from them before. This way the direct lender is more informed when making their lending decision.

It makes sense that applying for a short term loan with a direct lender is the best option. There are different types of loans which a direct lender can provide to you. The information you receive about your loan is clear. Because you’re dealing directly with your lender, you can ask them any questions and get straight answers. Having that one to one contact with your lender makes things easier. It’s also reassuring knowing that your information is being handled safely.

Is Lending Stream a Direct Lender?

Yes, Lending Stream is a short term loans direct lender. There’s no middleman with us, and we keep the application process fast and easy with a Representative 1333% APR. We understand that short term loans are often needed in an emergency. That’s why, if your loan’s approved, we send the money to your bank in under 90 seconds.

Lending Stream is a direct lender you can trust. We won’t share your details with any third parties, and we’re approved by the Financial Conduct Authority (FCA).

In Summary

It’s important that you check who you’re dealing with when applying for a loan – a broker or a direct lender. Make sure you know the difference when you apply. Taking out a loan with a direct lender like Lending Stream keeps things simple. It’s quicker, easier, and you know who you’re talking to.

Borrowing money is a big decision. Having a loan can ease your short term cashflow problems so long as you do it right. Make your borrowing decisions wisely, and only take out what you can afford to pay back.

Disclaimer: Please note, we are not providing financial advice. Our blogs are written for informational purposes only.