When people borrow money, they tend to focus on the size of their loans rather than the source. After all, what does the type of lending company matter as long as you receive enough cash to cover your needs at an affordable rate?
The answer may surprise you. Choosing an online direct lender has a big impact on your borrowing experience, influencing everything from the type of loans you may qualify for, the speed you receive your funds, and who contacts you about your account. Keep scrolling to learn more.
What Are Online Direct Lenders?
To understand these lending companies a bit better, it’s easiest if you break their name down into two parts.
It’s as you’d suspect. Online lenders provide online loans.
Some may have a brick-and-mortar branch, but most won’t; without an in-person location, they carry out every step of the lending process online, and with many of these steps automated, you may receive your funds faster.
Have you ever used a loan matching service? These companies act as a broker that shops your request around to its network of lenders before it connects you with a financial institution that will grant you funds.
Now imagine the process without the matching service. Once you remove these other financial companies from the equation, you’re left with just the lender that underwrites your online loan.
That’s what a direct lender is. You work directly with a singular company that facilitates every step of the lending process. They decide if you qualify, they fund your loan, and they organize your repayment.
What Kinds of Loans Do They Offer?
The above definition of online direct lenders is a loose one, which means there’s plenty of room for lending companies to provide a broad range of products.
- You can find direct payday lenders that provide small cash advances due back by your next payday.
- There are installment loans direct lenders that grant funds you must pay back over multiple payments spread out over time.
- You can even find lines of credit offered by online direct lenders.
What Should You Look for in a Direct Lender?
Without a matching service involved, you’ll have to search out the lender and not the other way around. A quick search online generates millions of results, but not all of them are worthy of your time.
For one thing, location plays a factor even though the borrowing experience unfolds online. Lending companies require licenses from individual states before they can grant funds. This means only borrowers who live in these states where a lender is licensed may apply, even though anyone may access their website from anywhere in the world.
For another, you’ll want to narrow down your options to ensure you’re working with a lending company that cares about your financial well-being. In addition to a license, you’ll want to make sure they have a robust security policy to protect the data you share over the web.
You should also pay close attention to their rates and fees to ensure it’s something that you can afford.
Find out What You Need to Qualify
The world of online direct loans is a big one where many lending companies operate. Each one offers a different product set with different rates, terms, and conditions. Now that you know the basics behind these kinds of loans, take some time to fill in these details to learn if you qualify.