Difference Between Payday Loan Brokers And Lenders
When you are applying for a payday loan you will either apply for it through a lender or a broker. But before you proceed with your application you should first understand the difference between a payday loan broker and payday loan provider.
A broker is basically a company or a person who has a relationship with several loan providers. So, when you approach a broker, they will have number of loan providers that they can get you in touch with. But a loan lender is the financial institution that can lend you a loan directly. A broker will never actually be able to provide you a loan.
Loan brokers have twofold purposes. They will help you to find the best possible loan deal without wasting a lot of your time and money. They also provide a valuable service to the lenders by introducing them to different types of customers.
Most of the loan brokers do not charge any fee. Basically, they have commercial relationships with loan providers and they pay them a commission. The main goal of the brokers is to negotiate an attractive deal for customers. Generally, payday loan lenders have to be very transparent about their fees, charges and APR. Thus, it would be difficult for a broker to charge a fee or be more expensive unless they charge an upfront fee for their services. All reputed lenders refuse to work brokers who charges fee as it is considered to be a bad practice and a bad type of service.
In order to locate the right loan deal that meets your requirements you need to look for a good broker. It is recommend that you carefully go through the terms and conditions to make sure you are not charged with any extra fees that will further increase the cost of your loan borrowing. Brokers should be clear in explaining you that you will not incur any fee and that they only work with reliable lenders. No matter what, you should not provide your debit card details until and unless you are sure it is required for the purpose of loan repayment.
Different lender has different set of lending criteria. Approval decisions will be based solely on their credit policies. Credit checks will be performed ahead of approval. Lenders will go through your credit history and use the information ahead of taking a decision.
There are several fears that people have in their mind about brokers. As most of the loan applications are today done online, people are likely to get more confused if a broker will be able to find you the right lender. Thus, it is recommended that if you have any doubt speak to the broker directly and also take a look at the lender.
Payday loans broker does not lend the money themselves, which means the ultimate approval decision is not in their hands. But when you go to a payday loan lender and apply for a loan directly, there are chances that you may not get the best deal for yourself. The world of finance and loan lending is complicated and you are likely to get confused if you fail to understand the terminology.
Compared to traditional long term loans, Payday Loans are small short term loans that carry high APR and are offered for a very short tenure. The high APR can make a huge difference to the end loan amount that you will have to repay. Besides, the terms and conditions and the repayment structures may vary among the lenders. So, when you have applied with a lender and get rejected it will have an impact on the decision made by another lender. Thus, considering the best possible loan lender as per your circumstances is important.
Some of the important things that you need to consider when looking for a Payday Loan are-
- Consider the cost of the Payday Loans
- Interest charged,
- Repayment tenure and
Do not forget to compare and research through the websites. It will help you build your knowledge and make an informed decision on if you should apply for a loan through a lender or a broker. Here, you should understand that when you apply for a payday loans, you will signing an agreement with the lender and not the broker. Make sure you take time to assess the offering and terms to ensure you select the best lender for your cash needs.