Payday loan direct lenders vs payday brokers
If you have been considering a payday loan, chances are you have done a bit of research into what they are, how they work and where you can get one. You have likely come across payday loan brokers and direct lenders. Both of these work slightly differently, and it is important to understand the differences between them and compare both options in detail before making a decision.
Deciding between a payday loan broker and a direct lender isn’t an easy decision. Ultimately, it depends on what you are looking for and how much work you are willing to do for yourself. Here is our guide to everything you need to know about choosing between a broker and a lender.
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What are payday loans used for?
Everyone has experienced some unexpected situations and had to find cash during inconvenient times. Whether it’s a household emergency, like a broken oven or a car repair that you cannot postpone, these urgent costs can present problems. When you haven’t budgeted for such expenses, you will likely find yourself looking for other ways to get funds quickly, such as a payday loan.
What is a payday loan broker?
A payday loan broker is a business or individual who can help you to find a loan. They help borrowers to understand the terminology and complexities of payday loans and other financial products. Brokers are essentially there to do the hard work for you and find the most suitable payday loan for your unique requirements. A payday loan broker will discuss what you are looking for and set out to find lenders offering precisely that. They will take the time to look at interest rates, additional fees and repayment terms on your behalf.
Is it free to use a payday loan broker?
Payday loan brokers might sound like a great option as they do most of the leg work for you. However, it is important to understand that it may not come free. Some brokers may charge you a fee for their services and usually add this to your payday loan amount. Some brokers take their fees from the lenders, as opposed to the borrower, so be sure to understand if you will be charged. A payday loan broker will not be able to provide you with the loan itself, although sometimes it can seem like they are. Instead, a broker will be outsourcing your loan to a direct lender.