Often times, you would have come across marketing gimmicks propagating “direct to lender” loans as the perfect median to reach a debt free future. But is that so? Have you ever considered, how?
The claim is a half baked bean which is far from being a fact! Brokers are the mediators between a lender and a borrower. A single broker helps you connect with several lenders. Then, why not reach a broker rather than going one on one to a lender? Let’s find out a definitive answer to all these queries and understand the difference between the approach of lenders and brokers.
1. Loan processing
When you contact a loan broker, say for, short term loans for bad credit, your loan application is forwarded among a pool of lenders as against a single forward with a direct to lender application. You cannot contact multiple lenders as an individual. For, a series of loan queries pose multiple rejections’ risk which can practically destroy your credit report.
Brokers on the other hand ensure soft credit check on your loan application. You being an individual can never question a lender for why they started a hard check and made a footprint in your credit report.
- Safety of deals
When you contact an FCA authorised loan broker, you need not worry about the legitimacy of bad credit loans. The authorised brokers contact with lenders with proven track record and ensure safe deals. Many a times, loan sharks pose as FCA authorised lenders and they are shut operations after fooling around a considerable number of clients. It is thus safe to deal with brokers with rich experience only.
- Flexibility and affordability of deals
Being professional financial advisors, brokers are able to hunt for rare deals with lowest rates. You could be rest assured of flexible deals with affordable installment plans with the help of brokers. However searching installment loans for bad credit by yourself is a very hard task.
- Bad credit borrowing
Most of the lenders shy away from people with bad credit history. Those who do extend a hand of help charge a very high interest rate. So rather than contacting a lender directly you should contact a loan broker and choose bespoke unsecured loans with bad credit. Whether you seek no guarantor deals or need no collateral deals a broker can find solution for all situations.
- Credit improvement
The rate of interest is always high for bad credit loans. And when you fail to repay this loan, the rate of interest escalate even further. Thus it is important to plan the loan repayment plan before availing a bad credit loan. The brokers particularly help borrowers with poor rating plan their loan repayment. By searching for custom made loans according to individual credit requirements, brokers ensure that you make the right choice.
Clearly the role of a broker is significant for searching a bad credit loan. However you should not forget that as important it is to search a desired deal as is the repayment of loan.
Repayment of bad credit loans calls for total financial discipline till the time you pay off your all debts. Whether it calls for lifestyle change, frugal living or recycling, do everything to minimise your expenses and save as much as possible. You should not only plan for the loan instalments but look for ways to prepay the loan. The zeal to get debt free is the only driving force to mend your bad credit score.