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 as an individual can never question a lender for why they started a hard credit check and made a footprint in your credit report, as lenders do run an affordability check before sending you an approval for the loan amount.
2. 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 are already in contact with direct lenders with the proven track record and ensure safe deals. Many a time, loan sharks pose as FCA authorised lenders and they have shut operations after fooling around a considerable number of clients. It is thus safe to deal with brokers with rich experience only.
3. Flexibility and affordability of deals
Applying for a loan via loan broker can help you get affordable and flexible deals.
4. 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 the solution for all situations.
5. 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.
Clearly, the role of a broker is significant for searching for a bad credit loan. However, you should not forget that as important as it is to search for the desired deal as is the repayment of a loan.
Repayment of bad credit loans calls for total financial discipline till the time you pay off your all debts. Whether it calls for the 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 repay the loan. The zeal to get debt free is the only driving force to mend your bad credit score.