In a sluggish economy plagued by inflation, loans have become the norm to make ends meet.
Last autumn, the budget specifically made provisions to protect borrowers from predatory lending practices. This was due to reports of lending institutions and private lenders taking advantage of vulnerable loan borrowers and forcing them to pay exorbitant interest rates.
However, these changes also led to an increased awareness about responsible borrowing and lending. People are becoming more discerning about their borrowing options and how to manage their debts wisely.
While loan options like payday loans, bad credit loans, and personal loans play an important role in life, it’s crucial to be mindful when choosing a lender. Here’s where direct lenders become relevant.
In this article, we’ll explore the perks of borrowing from direct lenders and how the right lender can help you manage your finances.
1. Easy Application Process
Loan application processes are often a hassle for borrowers, especially when you’re looking to borrow for urgent needs and time is of the essence.
Direct lenders can help make your loan borrowing experience a breeze. With direct lenders and digital applications, the need for extensive paperwork is significantly minimised, making for an easy application process. This ensures that you can focus on the emergency at hand and helps speed up the disbursement of your loan. Direct lenders are also easy to find online and make loan applications more accessible.
Today, many direct lenders operate through mobile applications and have user-friendly websites. This initiative is especially helpful for the elderly, individuals with mobility issues, and anyone who wants to save themselves time and money.
2. Flexibility
Direct lenders offer greater flexibility in loans compared to traditional lending institutions.
Banks often have rigid criteria for loan applications and cannot amend their rules on a case-to-case basis. They’re also more likely to offer loans to borrowers with good credit scores, which makes them an unsuitable option for those with bad credit.
Direct lenders, on the other hand, specialise in making accommodations for unique financial situations for people with a wide range of credit scores. This flexibility makes them an excellent choice for those with a thin credit file, low borrowing experience, or existing debt.
Many direct lenders don’t just refer to borrower credit scores but instead use employment history, utility bill payments, and other factors to determine loan eligibility. These lenders are also often flexible with terms of loan repayment and instalment amounts, making them an inclusive and accessible financial option.
3. Transparency
Indirect lenders and traditional lending institutions perform their due diligence for every application, scanning all loan documents for any hidden fees.
The use of complex legal jargon in loan documents only adds to the difficulty in comprehending how these fees would impact your overall loan amount. Application fees, incorrect information fees, arrangement fees, legal fees and prepayment fees are some of the common types of fees you may encounter.
In comparison, direct lenders are open about the costs you’d have to pay on your loan so that you are not caught off-guard later. This transparency ensures you understand their terms and conditions and are fully aware of what you’re signing up for when making your loan application. It also helps you make informed decisions and ensures you take the right loan.
4. Better Customer Service
Traditional lenders, like banks, are known to have a complex hierarchical structure, which can make it challenging to address any complaints or doubts. They’re also less likely to guide you on managing your loan repayment if you’re facing financial difficulties.
On the other hand, direct lenders address any issues with clear communication and offer better, more personalised customer service.
As they don’t deal with intermediaries or have a complex organisational structure, direct lenders are in a better position to help you manage your finances effectively. They can also help resolve any doubts regarding your loan application, suggest a repayment plan, offer flexible repayment terms, help you find ways to consolidate your debts, or even budget better to meet your financial goals.
Conclusion
As individuals look for increasingly personalised borrowing experiences, direct lenders stand out with their advantageous offerings both in terms of customised loan options and flexible repayments.
While it’s important to do your due diligence in the case of all lenders, you can heave a sigh of relief when it comes to borrowing from a direct lender.
From requiring minimal paperwork to quick and easy disbursement of your loan, direct lenders offer you a better loan experience compared to traditional lenders. Their innate openness, transparency and willingness to help you with your financial goals make them an ideal lending choice.
