Advantages and Disadvantages of Approaching Direct Lenders for Short-term Loans

Advantages and Disadvantages of Approaching Direct Lenders for Short-term Loans

Direct lending means mediators like private equity firms, brokers, or investment banks get removed from a credit provision. The majority of borrowers seeking direct loans are SMEs or people in need of fulfilling their short-term needs. When a loan application is made to a direct lender there is no in-between, it is the lender that reviews and if criteria is met, they will approve the loan.

LoanPig identifies Short Term loans with a fixed APR of 292%. It has a vast lender panel that strictly follows the Financial Conduct Authority regulations. It is the best short term loan direct lender in Australia. People with bad credit can also apply because other criteria also get evaluated for eligibility.

With a direct lender, you will do all related activities like submitting applications, receiving the loan, repayments, and loan communications with only one lender. Direct lending has filled a market gap between lenders and borrowers with considerable debt or poor credit history with opportunities that otherwise may not be possible.

Advantages of dealing with direct lending services

Easy to access – Direct loans are easy to secure. In comparison to banks, the terms are more favorable. Direct lenders personally negotiate interest rates and loan terms, which is unfeasible with banks. Small businesses can instantly fund their development activities and smooth their cashflow.

Simplicity – Borrower has to handle a single lender about their loan-related activities like making an application, receiving a loan, and repaying. It becomes very simple to keep track of communication as there is no need to remember the broker’s or their associate’s name, who approved your loan.

Fast interaction – Communication lines are faster, especially when you need as your query gets handled directly with the lender’s employees. They easily access your case and help you straight away. If there is a broker involved, you need to communicate through a medium that adds to potential delays.

Resolve repayment issues – In case of repayment issues, you can discuss it straightaway with the direct lender. They can determine the repayment loan terms without any kind of ‘middle-men’ in the picture. You can feel relaxed and keep repayment manageable.

Disadvantages

  • The loan market is competitive, yet nobody will accept to offer loans at unreasonable rates. The lenders need to be in sync with the competition, so they are obliged to offer the best possible deals. You submit a loan application and get the loan terms. There is no option like pick and choose from multiple offers. It means to accept the terms if you want a loan or move elsewhere.
  • There is no other way to reapply for rejection of your loan application or you disagree with the loan terms. You will have to approach another lender and go through the process all over again. It can be time-consuming if your finance needs are instant.

Before you approach a direct lender, it is essential to understand a short-term loan. It is not a financial solution for the long term. In case emergency financial problems head your way consistently, then take advice from debt management consultants.

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