The Internet is vast, overwhelming, and incredibly convenient. Although it improves borrowers’ access to online installment loans, it also introduces numerous risks. After all, if you don’t select a reputable lender, you might find that your personal and financial information has been sold or that you have been charged for a service you did not request. In rare cases, the fraudster might even steal your identity. And if you don’t choose direct lenders, your personal information will be passed on to numerous, nagging lenders hoping to finance your loan.
For those unfamiliar with installment loans, the word direct in this context may be confusing. “Aren’t all loans direct?” they might wonder. “Or does that mean the funds will be sent directly to my bank account?” In fact, the concept of direct lending refers to the transaction procedure and the communication involved, not the form of delivery.
What is a direct lender?
When you apply for a loan with a direct lender, you will work directly with that lender throughout the lending process. You might think this fact is obvious and expected. Why wouldn’t you work with the lender to whom you have applied? In actuality, many so-called “lenders” are not direct lenders at all – only affiliates or aggregators. These devious companies farm out loan applications, sending your personal contact information to numerous lenders. These lenders will then begin contacting you, vying for your business through e-mails, phone calls, and letters. So if you don’t like telemarketers and junk mail, steer clear of affiliates and loan aggregators. This is certainly not the only reason to avoid them, however . . .
Why choose direct lenders?
The basic difference in definition between direct lenders and affiliates/aggregators may persuade you to prefer direct lenders. To cement your decision, discover the additional benefits of working with a direct lender:
- They respect your privacy. When you apply for a loan with a direct lender, you know that your personal and financial information will remain private. Your phone number, address, bank account number, etc. will not be farmed out to dozens or even hundreds of lenders, and you won’t have to worry about companies you’ve never heard of calling you up, sending you brochures, or saving your information in a database.
- They will speak directly with you. Instead of working with an affiliate, which is essentially a middleman, you can speak directly with the company providing your loan. This is especially important before you apply for your loan, because you may need to ask the lender questions or discuss your concerns before you commit to an application. Communication is crucial, and direct lenders will ensure that the process runs smoothly.
- They offer affordable loans. When you cut out the middleman, you shave down the price as well. Plus, because the competition is more fierce online, you will find lower prices if you stick with online direct lenders. To be sure that you’re getting the best price possible, shop around and compare several viable lenders.
- They provide quick approval. Because you’re working directly with the lender who will provide your loan, you can eliminate some of the wait time. In fact, many direct lenders will offer a response to your application within 24 hours. Whether you’re approved or denied, you will certainly appreciate that the waiting period is short.
- They may offer instant funding. Although this benefit does not apply to all direct lenders, if you’re seeking a speedy loan, look for lenders offering instant funding. As soon as your application is approved, the funds you have requested will immediately be sent to your bank account.