Direct Lenders

2007-07-24 08:31:47

( Financial )



Loan Brokers vs. Direct Lenders

In looking for a loan, you have the choice of consulting loan brokers or direct lenders. Loan brokers are intermediaries or middle men who help you find the right loan that will match your requirements. On the other hand, direct lenders can be any financial institution such as a bank or mortgage company that can directly handle your loan application as well as service your debt for you.

Dealing with Loan Brokers

The loan broker maintains numerous contacts with other lending entities. Thus he knows which of these institutions can give the best loan rates and conditions. He will know which ones prefer to deal only with borrowers who have clean credit histories, or which ones can accommodate sub-prime ones.

Since the loan broker does most of the legwork in looking for lenders on your behalf, you save on time and effort. This comes in handy if you have a very tight schedule but need to borrow funds badly. The loan broker can assist you with your documents, and gives you advice on what to anticipate from the lender, as well as help you resolve problems about your loan.

On the other hand, a loan broker may charge expensive origination fees for his services. He might know only a few lenders, but will have you believe that their offers are the best ones. He himself may not also be competent, or worse, he may be someone unscrupulous or dishonest.

Dealing with Direct Lenders

You submit a loan application to the direct lender who will then determine your credit worthiness and ability to pay the monthly amortizations. The direct lender also charges you fees before you get the loan proceeds. After your loan has been approved, you pay the amortizations to the direct lender.

If you have the time to communicate constantly with the direct lender and are able to prepare the documentation without need of assistance, borrowing through the direct lender may be a better choice for you.

The disadvantage of dealing with direct lenders is that many of them have limited loan packages or less than ideal interest rates. Direct lenders may not always give you adequate guidance and advice on handling your loan requirements. The task of looking for the best loan deals alone already consumes a lot of time and effort on your part.

Loans Through Internet Access

The internet has become a convenient and reliable place to hunt for a good loan.
There are now many direct lenders, such as LoansDirect and the federal government's Direct Plus loan program, who have their own sites. The sites provide detailed information about the background and loan programs of these direct lenders. You can also send email to request for more information, and to apply directly at the site. Approval of your loan is fast and prompt.

You may also contact the numbers provided by these direct lenders to ask for more information.


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