Direct Lender Loans: Expensive but Efficient & Easy - PowerPoint PPT Presentation

View by Category
About This Presentation

Direct Lender Loans: Expensive but Efficient & Easy


Non-Bank Direct Lender Loans go strong despite many of the disadvantages being amplified. But are they worth that added expense? Let’s look into it. – PowerPoint PPT presentation

Number of Views:16
Date added: 3 August 2020
Slides: 5
Provided by: cashamericatoday
Category: Other


Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Direct Lender Loans: Expensive but Efficient & Easy

Direct Lender Loans Expensive but Efficient
Advantages often come at a cost and there isn't
any exception to this rule when it comes to
Direct Lender Loans. Surveys and studies go to
show that non-bank Direct Lender Loans - or what
we shall refer to, here for the purpose of this
article as simply Direct Lender Loans - stay in
demand despite all the critiques writing and
talking against them. The loan borrowers, who
stand in the millions in US alone, tend to share
that the higher expense versus a bank loan is
still valuable due to these main reasons 1.
Completely online services of some lenders 2.
Services available for bad credit borrowers 3.
Very short term loans 4. Ease of
application 5. Quick service of some reputable
lenders 6. Small loans available through
mobile apps Data when studied, tends to reveal
that these reasons are able to make up for the
higher interest rates and charges that Direct
Lender Loans feature. Online Direct Lender
Loans Gaining popularity by the day, Online
Direct Lender Loans can be a safe and convenient
option and this seems to be the biggest advantage
that the loans are enjoying. Being accessible
from anywhere, online loans are good for not just
convenience but in the case of Direct Lender
Loans, also for safety. This is easy to
understand, when you notice the process by which
most people tend to apply for Direct Lender
Loans. When the applicant chooses a bank loan,
safety is virtually a given because banks tend to
be large, established entities with a presence
and reputation. However, this may not be the case
with other direct lenders. To understand if it's
safe to deal with a particular direct lender, one
has to look at their past performance and
reputability. It's much easier to do this for
online direct lenders than it is to do so for one
with a missing online presence or
services. Today, the market of Online Direct
Lender Loans also faces a lot of competition and
this is leading to benefits for the end users
too. Loan terms are getting better and the speed
at which lenders respond and deposit funds is
becoming faster. This is being assist with better
safety standards, faster internet connections and
greater back-end software that is leading to an
enhanced output that is expected to only improve
customer satisfaction over time.
Direct Lender Loans which skip the Credit
Check "No Credit Check Loans" are according to a
lot of data, the most sought after Direct Lender
Loans. Approximately 32 of the Direct Lender
Loans applied for in 2018 according to a survey,
were due to Bad Credit history of the
borrowers. The practical reason some direct
lenders are able to skip the invaluable inputs of
the credit system is simply that such loans are
typically very short term in nature. In a very
short term loan, the income of an individual
ought to be a more valid indicator of their
ability to repay, than their repayment history
and their credit score management skills. This
however is also the reason why the loans remain
expensive despite the competition. The expense is
because the No Credit Check policy makes it a
higher risk loan product. For any higher risk, a
lender shall require higher returns for if things
go south with a borrower, the loans stay
cushioned through the interest rates earned from
other borrowers, which are in totality expected
to keep the business going. But as a mathematical
reader may have probably understood by now, it is
not a fool-proof situation but nothing in the
debt market really is. CashAmericaToday is a
reputable direct lender providing No Credit Check
Loans and other loan products. How expensive are
these Loans? Understanding exactly how expensive
loans are, is something that I notice is quite
rare amongst borrowers. This is not surprising
when you try to compare multiple loans. Some are
compounded monthly, some, quarterly, some
semi-annually and some annually while the rest
are not on a compound interest at all - e.g.
payday loans are mandated to offer simple
interest loans.
And then there is a fee that might be a constant
or a percentage of the borrowed amount or a
combination of the two. It does get confusing and
it is hard to compare two loans until the time a
borrower does the practical thing comparing the
final amount to be paid in both cases. That is
definitely the advisable to do in order to
compare two loans, but in general it's quite safe
to state that Direct Lender Loans can only be
less expensive that a bank loan when the term of
the loans are really short. In perhaps every
other circumstance, Direct Lender Loans ought to
be more expensive due to the greater risks
involved for the lender. When to Avoid Direct
Lender Loans? Direct Lender Loans are useful and
easily available and as we all understand they
tend to be on the higher side of the cost
spectrum of loans, especially in the case of
longer term loans. For this reason and a few
others, there are times when these rather
tempting loan products, need to be given a second
though before being taken up. Here we share the
situations that should trigger such a
reconsideration 1. When you are stuck in a
debt cycle People do fall prey of the credit
system some times and getting stuck in a debt
cycle is a situation that many borrowers know and
understand, needs to be avoided. Yet, it does
happen to some and taking any loan at this time,
can be a mistake if you do not understand the
system well. Some credit advisors however may be
able to understand your situation and even coach
you on ways to escape the situation including
even taking a Direct Lender Loan such as a debt
consolidation loan for it. 2. When you're in a
long term need The high APRs of Direct Lender
Loans are the way they are because they're
intended to be short term loans. If you need a
long term loan, look for one with a low APR. 3.
When bank loans are available and can serve you
If you're not in too much of a hurry and bank
loans are available to you, it should not be a
problem to choose that option - they would tend
to be less expensive. However, if what you
specifically need is a very short term loan, you
may have to do the mathematics to understand
what's less expensive. 4. When your credit
history is great and there are other quick enough
options available There are other quick loan
options out there. Some banks offer pre-approved
loans to their long term customers, which are
fairly quick. If credit history is not a problem
in your case, you must first consider those
options which may come at a lower cost. 5.
When you have not done your homework on the
lender There are illegitimate direct lenders out
there. There are ways to know which ones are
legitimate - a simple search online and reading
through a few genuine reviews, could reveal a
lot. Also, understanding what fake deals and bad
marketing looks like, can raise red flags and
those must be taken seriously to avoid any real
threat. 6. When you're nearing bankruptcy
Since Direct Lender Loans are intended to be
quick and with minimal checks and verifications,
you're the one who needs to know that bankruptcy
isn't near when you take this loan. Unlike loans
with collaterals and bank loans, bankruptcy
cannot be used to close these loans and the
penalty of non-repayment will just keep piling up
if you hit bankruptcy with such a loan still
outstanding. Loans for Urgent Requirements Loans
are available from many direct lenders who claim
to be quick at processing the funds with a
guarantee on approval. This does sound too good
to be true but at a second glance, one may
understand how this works and what makes such a
claim stick at all.
The legitimate direct lenders that claim a quick
service, ensure that they do not claim that the
money shall be credited to the borrowers within a
specified short time from their application. They
tend to commit quick service in general or
specify that a part of the loan process shall be
complete within a committed time frame. This is a
claim they can manage to stick to but keeping
certain processes in place. For example,
providing a guarantee on loan approval within one
business hour of application may not be
unmanageable when the credit check process is
skipped altogether. The other guarantee some
lenders claim to make is that of approval - they
guarantee approval of loans. This term typically
comes with the clause that allows the lender to
stipulate the minimum requirements for the loan
eligibility and the liberty of discretion of the
loan amount approved for the eligible borrower.
This combination again, makes the claim fairly
manageable in the real-world scenario. Hence,
while Direct Lender Loans are the go-to solution
for many Americans with urgent requirements, no
debt product can be relied completely upon for
approval and deposit as many variables makes some
deals fail. That said, many reputable direct
lenders today, maintain a history of better
approval rates of loans than banks and other
direct lenders, even for their quickest loan
products. An example of such a product is the 1
hour online loan by CashAmericaToday, which
promises approval within a single business hour,
provided all requirements of theirs are in order
in the loan application. Conclusion When you're
looking for a loan with no collaterals, easy
application, quick disbursal and easy acceptance,
Direct Lender Loans are probably your go-to
option. With a little understanding of the market
and some online search of reviews and past
performance, it can be easy to find a legitimate
direct lender. Where a bank is able to serve you
exactly what you need, there is no doubt that
it's the safer and less expensive option.
However, the existence and prominence of non-bank
lenders revolves around everything that banks
loans remain unable to serve and this is why
despite the higher expense, many borrowers
continue to find value in the services of direct
lenders today.