There comes a time in each person’s life where he/she has an emergency bill to pay, and no easy way to pay it. It’s not something to be ashamed of, it’s just simply what it means to be human. When that happens, one needs to consider all his/her choices in order to make the best choice. This is where payday loans come in.
So what is a Payday Loan?
A payday loan is exactly what it sounds like, a loan that’s expected to be paid back by your next payday. Granted, these loans are far more flexible than when the term was coined, but by and large, payday loans should be paid back by your next payday.
That is why they usually cover relatively small amounts ranging between a hundred and a thousand dollars. What’s more, they are much easier to get than bank loans and are accessible to those with a bad credit score. So if banks aren’t the usual source of these loans, then who is?
Direct lenders are businesses and companies which make a profit off of payday loans by charging interest on these loans. Because they are willing to lend to individuals with bad credit scores and histories, they often charge higher than expected interest rates in order to cover for the increased risk of not getting their money back from borrowers. They are called “direct” because you are able to request loans from them, usually online, without any need for a broker.
What is a Broker?
A broker is basically an intermediary between the borrower and the direct lender. Though you don’t need a broker in order to get a payday loan, it might be beneficial to get one. Even if you ultimately decide that you don’t want to use a broker, it’s best to understand the pros and cons of going with and without a broker.
Using a Broker
If you wish to use a broker, you stand the chance to save money by finding the best interest rates available in the market. In addition, a broker can help you steer clear of shady direct lenders who may end up being more trouble than they are worth.
Of course, brokers always save you time and energy and are often a good choice when looking to compare details among a large group of lenders, such as the largest amount that can be lendable.
Truly Direct Payday Loans
However, these advantages may be rendered irrelevant by broker fees and, chances are, if you need a payday loan, to begin with, you probably don’t want to pay any additional fees. To add to that, oftentimes people would rather deal with payday loans direct lender no brokers as it grants them peace of mind.
If this is your preferred route, you must remember that submitting your personal information to different direct lenders may negatively affect your credit score and history because lenders are wary of borrowers with a long history of payday loans.
Regardless of which option you prefer, what is important to note is that you are perfectly free to contact lenders directly or go through a broker. Payday loans are accessible to you, even with a bad credit score; it just depends on which route you prefer.