Payday Loans no Brokers

The world of Payday Lending has risen exponentially and it this rate of growth that has allowed skeptics to seize the opportunity when it comes to criticizing the unclear dynamics of this industry. There are several companies of the likes of Wonga, Payday UK that have more than doubled their workforce in just a span of one year and have increased their profits in exponential terms in the same time period. Therefore, there was a need to understand if this growth was leading to a more stable financial environment. However, it has been found that they have done more harm than good. It is unfair to say that only these lenders are responsible for this as we as customers have not learnt how to be responsible for the money that we borrow.

Talking in the same context, just like conventional banking, this industry has been divided into direct lenders and brokers. Direct lenders would be the lending agencies themselves whereas the brokers are usually individuals hired by these lending institutions to scout for potential customers and increase their customer base.

Differences between Direct Lenders and brokers and why for payday loans no brokers are a more feasible option:

Although it may be a good idea to hire a broker if you are looking for different lenders to fund your requirements, however in the long run, it is not considered a feasible option. There are several reasons why this is the case:

·       Brokers represent several lending sources as opposed to direct lenders who are a sole lending source. Brokers usually take longer to close the loan as compared to a direct lender as direct lenders are a one-stop-solution for all your funding needs.

·       The main problem is licensing. Most brokers do not have the licensing privileges in all the states you are applying for a loan and this could lead to serious complications. Direct Lenders do not have that drawback.

·       The fees which is usually an area of concern is something that is decided on the basis of your ability to pay, your debt to income ratio and so on. Lenders might not be able to serve that advantage as well. Brokers, since they are independent, have usually more time to tell you where you can reduce your costs.

·       Some people are under the impression that they get their rates on the basis of separate lenders. In reality, it is all decided on the plays of the secondary market and these rates are common to all. However, if you are dealing with a broker, you will not have the benefits of knowing what the best interest rate is, as a broker is always dealing with a lender that is giving “HIM” the best rate of commission.