Lending is direct when the loan comes straight from the lender itself, rather than through a third party. Even when you find a creditor through a comparison site, if you submit your application on the lender’s website, and they transfer the loan to you, then it is still considered a direct loan. This is the same for payday loans and there are some advantages to using direct payday lenders, though ideally you should still use a comparison site first to ensure you’re getting the right kind of loan for your circumstances.
What are the advantages of using a direct lender?
Part of the reason payday loans are so popular is because they are so quick to access and one of the main advantages of applying directly with a creditor is to save time on the application process. If this process is stunted by third parties, it could cause additional cashflow issues for customers. Applying directly means you supply the lender with the exact information they need in order to assess your application, they can start their lending decision process immediately and if you are approved, the funds are transferred to your bank account straightaway. Using a broker doesn’t really take that much longer, but there might be additional steps along the way.
Benefits of using Brokers
Of course, there are also benefits of using a payday loan comparison site, also known as a broker, to find a short term loan. The main benefit of not applying directly is that you are presented with a range of loan options in a clear format, usually ranked from cheapest to most expensive. It means you don’t have to individually research each lender and use the loan calculator on each website: you enter the information once (loan amount, and loan duration) and the loan comparison site will provide the options available.
Using a broker this way can also present payday lending options you hadn’t previously considered, for example repaying the loan over 6 months instead of in one instalment on your next payday.
Should you use a payday loan?
If you’re looking for small loans because you have just a temporary cashflow shortfall, then payday loans could provide you with a reasonable way to manage that issue. There are various advantages to using payday lending:
Quick applications
Payday loan applications tend to take around 10 minutes these days, so even if you’re in a hurry, applying for this type of credit shouldn’t further your cashflow issues in the meantime.
Available online
Most payday lenders offer their service online with automated loan assessments so you can apply any time of day and any day of the week, and still receive your loan decision straightaway. This also means you don’t need to visit a branch.
Greater accessibility
Some mainstream credit facilities will only consider people with excellent or very good credit scores and credit histories, so if you’ve had any issues with borrowing in the past, it can prevent you from accessing certain types of credit. While an application for a payday loan is never guaranteed, there are higher acceptance rates for people with a bad credit report.
Instant loan transfers
If your application is approved, the loan will generally be transferred to your nominated bank account via the Faster Payments Service so you should see the money in your account almost instantly. Most lenders, including cashasap.co.uk, would however suggest waiting up to two hours if you don’t receive the funds straight away.
Payday loans can help you if you’re able to confidently make the repayments. Borrowing any kind of credit when your finances are tight could risk you entering further financial difficulty or putting additional pressure on your money management. There are various ways to borrow, however, which may be more suitable depending on your circumstances, so while there are advantages to using direct payday lenders, it’s always sensible to research the different borrowing options before applying.
