What is the difference? Direct Payday Lender vs Broker?
It’s time to understand the difference between direct payday lender vs broker. With all the jargon surrounding borrowing, it’s easy to get confused. And at LoanPigUSA that’s the last thing we want you to be – we want everything to be simple and easy to understand.
That’s why we would like to tackle a few common questions and misunderstandings about direct payday lenders vs brokers. All in all, direct lenders and brokers are not the same. They differ significantly and understanding these key differences will determine which one is right for you.
What is a Direct Payday Lender?
Direct lenders are considered any financial institution that can provide loans directly to borrowers without intermediaries. Instead of going through the middle-man to find the right lender, and service your loan, a direct lender will do everything in-house. Form examining your credit report to having over the final check, a direct lender is a one-stop-shop for everything.
A key difference between brokers and lenders: the application process. When working with a direct lender, you apply directly with their company.
Here are some benefits of working with direct lenders:
Benefits of Direct Payday Lenders
Highly regulated to restrict predatory lending or unfair terms
Can process your loan faster, especially if the lender has in-house underwriting
As the loan originator, a lender may save you money in the loan process
No hidden costs worked into the loan
Drawbacks of lenders
- Have to apply individually to each direct lender
What is a Broker?
Brokers act as intermediary or “middle-man” who brings borrowers and lenders together. They match you with the loan that they believe best fits your needs. They gather a borrower’s income, asset and employment documentation, credit report, and other pertinent information for assessing how much home borrowers can afford. Then submits the loan to a lender for approval. They also maintain communication between the borrower and the lender during the entire transaction.
Benefits of Payday Brokers
You receive options without having to call multiple lenders
Help borrowers with their application to streamline the process
Knows the right national or regional lenders to secure a loan for an individual
Drawbacks of Brokers
Charge a final fee based on the amount
Some brokers attempt to increase profits by writing hidden costs into your loan
LoanPig USA is not a loan broker, lender or agent for any lender or broker. We are an advertising referral service to qualified participating lenders that may be able to provide loan amounts between $100 and $1000 for cash advance loans and up to $2500 for installment loans. We consider ourselves a gateway to a large panel of lenders. So that you don’t have to go out of your way to search through each different lender. You’ll also be saved the time of filling out an application for each lender you find. As we send out your application to a variety of lenders to save you the hassle.
Whether you decide to use a broker or a lender, you should always shop around for the loan that’s best suited for me.