More people are using personal loans to cover expenses that income and savings can’t cover. They’re also using personal loans to pay old debts and get a better interest rate.
They’ve become so popular, that it’s become an industry worth over $120 billion. There are a variety of ways to get a personal loan, from personal lending sites to working with a direct lender.
Do you want to know more about personal loans and why you should work with a direct lender? Read on to find out.
What is a Direct Lender Personal Loan?
There are two aspects to know when it comes to a direct lender personal loan. The first part is the personal loan aspect.
A personal loan is a loan that can be used for anything. It can be used to pay rent, pay for a vacation, refinance debt, start a business, or invest in education.
Other loans like auto loans or mortgages are loans that are used for the purpose of buying a car or a home.
A direct lender is a bank or financial institution that will make the loan directly to you. When you’re shopping for a personal loan, there are a few places you can turn to.
You can use a loan broker, a peer-to-peer lending site, or an aggregate site. These sites will collect your information and then match you with a lender.
A direct lender, on the other hand, is a financial institution that works with you directly on the loan. There is no middleman when you work with a direct lender.
Types of Direct Lender Personal Loans
Before you start shopping for personal loans with a direct lender, you should be aware of a couple of types of personal loans. This will help you find the loan that you need.
Payday Loan
How much cash do you need and how quickly do you need it? If you need a loan for about $500 or less and you need it within a day, a payday loan may be for you.
A payday loan is a small loan that’s meant to be paid back in full on your next payday. You can find out more about payday loans from direct lenders on this page.
Installment Personal Loan
What if you need a larger loan, like $2,000 or more? An installment personal loan would be the choice for you. These are loans where the interest and principal are calculated to determine your monthly installment payment.
You then pay that set amount for the life of the loan, whether that’s 6 months or 5 years.
How to Get a Personal Loan from a Direct Lender
A personal loan is a great financial tool that you can use for just about any purpose. These tips will walk you through the steps to get a personal loan from a direct lender.
Check Your Credit
The first thing you want to do is know where you stand financially. When you’re working with a direct lender, they just want to know one thing. They want to make sure that you can pay the loan back on time.
They’ll look at your credit score to determine your creditworthiness. This will also determine your interest rate.
If you have bad credit, there’s no reason to be discouraged. There are plenty of lenders who specialize in working with people who have bad credit.
Find a Good Lender
The big difference between a lending site or loan broker and a direct lender is that you have to do a lot of the legwork yourself.
With brokers and aggregate sites, you enter your information such as your income and credit score, and you’ll get a number of loan options.
Keep in mind that while these sites make life more convenient, you’re going t be paying for this service somehow. You can bet that some of these sites will get an origination fee or some kind of finder’s fee for that loan.
With a direct lender, you don’t have to worry about that as much. You do need to make sure that the lender is transparent with their fees.
A lender will outline any fees such as origination fees and early payment fees. You’ll also want to compare interest rates between lenders to find the best personal loan for your needs.
Finally, look at online reviews. Some of the best direct lenders will have a lot of reviews that are positive. Look for things that people mention, such as customer service and approval times, that are important factors.
Compare Rates
When you shop around for a personal loan, you are likely to discover that lenders will offer different interest rates and payment terms.
You’ll want to compare rates by prequalifying for a loan. You give the direct lenders your basic information so they can calculate potential loan scenarios. Doing this also won’t hurt your credit because it’s done using a soft credit check.
When you apply for the loan, they’ll use a hard credit check, which will appear on your credit report.
Get a Direct Lender Personal Loan
You never know when you’re going to need an influx of cash to handle situations like a car repair or home repair.
A personal loan from a direct lender can help you get the money you need quickly. You can get a payday loan if you need a few hundred bucks and pay it back in a couple of weeks. There are also installment loans that allow you to take out more money and pay the loan back over a longer period of time.
You do need to research various lenders yourself before agreeing to a loan. You want to make sure the direct lender has been around for a long time and has a great reputation. Before you sign anything, make sure you read the fine print and understand all of the fees associated with the loan.
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