When applying for a short-term loan or payday loan you have the option of going directly to a lender of your choice to make your loan application.
Alternatively, you might choose to use the services of a short-term loan broker.
Brokers work with a portfolio of trusted and approved lenders, providing consumers with the opportunity to compare loan offerings. This helps people find the most suitable option from a variety of products and providers.
In this article, we will explore some of the benefits of using a short-term loan broker, to help you when looking for your next payday or instalment loan:
A short-term loan broker provides security for your loan application
Lenders and brokers must be approved by the Financial Conduct Authority.
Some companies that are not approved can still have very convincing websites.
You can (and should) check the Financial Services Register to ensure that your chosen lender is authorised to provide your loan.
You should do this even if the website looks professional and the content seems legitimate.
Loan brokers have long-term relationships with the lenders that they work with. Lenders have been checked and approved. You can trust that they are genuine and will be regulated by the FCA.
By using the services of an authorised loan broker, you remove the risk of applying for a loan with an unregulated provider. Your details will not be sent to any lenders that do not feature on the Financial Services Register.
Loan brokers can introduce you to new lenders
When you search for a short-term loan you will likely visit the websites of the most well-known lenders, such as Wonga and QuickQuid.
Search engines also tend to favour the bigger, more popular lenders, which means that a Google search for payday loans online will show only the industry leaders.
This does mean that you could be missing an opportunity because you are unlikely to discover the smaller or newer lenders – that may have a more suitable offering.
A short-term loan broker like Cash Lady will work with a varied portfolio of loan providers. This means that alongside Wonga and other larger providers, they can also access quotes from the smaller companies.
You may find that your best payday loan quote comes from a lender you might have otherwise have missed.
A short-term loan broker can save you time
Some borrowers feel that they do not have time to shop around for a loan.
If you are short on time, you may be tempted to apply for a loan from the very first lender that you think of.
You might only visit one or two websites and could potentially end up settling on a loan that does not quite meet your needs.
Alternatively, if shopping around is important, you may waste time that you do not really have.
Using a loan broker can save you time because one application form is sent to a variety of lenders.
You will only need to provide your details once and will not need to visit many individual websites.
If you are applying for loans on your lunch breaks (for example), using a broker may be your best option.
A short-term loan broker can reduce your risk of a lowered credit rating
Applying for loan quotes can impact your credit rating, leaving lasting footprints on your credit file.
People with a low credit rating can often find it hard to borrow money and repeated loan applications can be counter-intuitive in preventing you from getting what you actually want.
If you are shopping around it is important to try and apply to lenders that you expect a positive response from.
Lenders recommend that you wait at least a few months after receiving a negative response before making another application.
Making multiple applications in quick succession could leave you unable to borrow any money at all.
The marks left on your credit file may indicate that you are in a desperate financial situation.
Of course, not all loan applications are successful on the first attempt. It can be disheartening to receive a negative response and you may be worried about the impact of moving elsewhere for a quote.
When you apply through a broker, you apply only once.
You will then receive quotes specifically from the lenders that are interested in offering a loan at which point you can apply direct to receive the money that you need.
This is often far better for your credit rating than making multiple applications
Using a loan broker provides instant access to the key details
Payday lenders are required, by law, to show clear and accurate information about the costs of their loans – the APR must feature clearly on the website and on TV advertisements.
This means that you should easily be able to see this important information when you are ready to apply for a loan.
Loan brokers bring all of this information to one page, making it even easier to review the details and to check that the loan is right for you.
You can quickly and easily compare loan features and prices before you progress with your loan application.
A short-term loan broker helps you to narrow down your options
Loan providers are not all the same.
Each lender will have their list of requirements for borrowers to fulfil, such as a minimum monthly income or residential status.
When you apply for loan quotes through a short-term loan broker, you will receive only suitable offers.
If you do not meet a lender’s criteria, then they will not feature in your list of respondents.
Using a specialist loan broker can be more efficient than applying direct because you do not need to spend time applying to lenders that will never approve your request.
To apply for a short term loan through Cash Lady, you must be at least 18 years old.
You also need to be a UK resident and have a UK bank account – as well as being employed with a regular income.
As long as you meet these minimum requirements, you can progress with your loan application. If other lenders have more stringent criteria, they will simply be removed from your list of results.