Today, there are around 160 lenders of bad credit loans, with Google returning an overwhelming 994,000 results when searching for brokers in the same industry. Given the size of the bad credit market, deciding where to turn and who to choose for finance can be confusing, to say the least. So it’s important to understand that there are numerous unique advantages to be gained from applying for bad credit loans through a broker.
Recent industry changes
The number of bad credit lenders and their brokers hit record highs prior to an industry shake up in 2014 which introduced stringent new guidelines. These new found rules consequently brought about a drop in both the number of bad credit lenders and brokers. These changes are also thought to be responsible for a 45% fall in clients contacting the Citizens Advice Bureau about payday loan problems.
Today, as a consumer of bad credit finance, you look forward to higher standards and more protection. However, you should always use an FCA authorised credit broker, as they are committed to maintaining certain standards and are obliged to follow strict rules.
In this article, we tried to compile a comprehensive guide on how bad credit loans work.
Applying for bad credit finance: What differences are there between a broker and an individual lender?
In truth, you’ll notice little if any difference when applying for a bad credit loan through a broker, as compared to applying through a single lender. The application process in both instances is usually undertaken online, and it is only at the review and approval stage that a difference is seen.
Should you be approved in applying for bad credit loans through a broker, you’ll see one or more offers from different lenders. These could be for your requested amount, or for a higher or lower amount for a shorter or longer duration. Below you can see how these loan offers are presented by CashLady. In comparison, a single lender will simply present a yes or a no answer.
How do bad credit loans through a broker work?
Credit brokers do not undertake any lending at all – they simply match borrower, with a lender from their network. Our lenders have been carefully chosen as they each reflect our own high values of transparency and commitment to customer care, including the providers QuickQuid, PayDayUK, Sunny, Satsuma and many more. You can read more about our approach to the fair treatment of our customers here.
Credit brokers should always be clear as to how they work and which lenders your information will be passed to. This information should be presented upfront and be easy to find on the broker’s website.
- You enter your loan requirements (e.g. the amount you need)
- Your information is passed to numerous lenders
- You are presented with offers from our lenders
- You select the loan that’s right for you
- You receive your cash the same day as you sign for your loan
- You pay and deal with the lender in question going forward
What are the advantages of applying for bad credit loans through a broker?
- Using a broker helps you find the best deal – Because we pass your information on to a panel of lenders, you benefit from discovering the best option for you from their solutions. This can help you secure the best rate and most suitable loan for your circumstances.
- Using a credit broker increases your chances of being approved – As our network of lenders, each has differing lending conditions in relation to your credit history you stand a far better chance of being approved.
- Credit brokers tend to offer a fast, seamless application process – Applying for a bad credit loan with CashLady takes just 5 minutes, can be completed entirely online and can ensure that you receive your funds the same day, should your application be approved.
Who decides the terms and conditions of my bad credit loan?
We clearly display our interest rate and representative APR and detail the total cost of borrowing before you apply. However at the stage of application lenders may provide their own offers, which could be subject to different interest rates and loan durations.
Because brokers merely act as a body that connects borrower with lender, it is the lender that decides the terms and conditions of your loan. The full conditions of your loan will be presented for your consideration before you choose to go ahead with the loan. This will include confirmation of the amount to be borrowed, the APR, the total interest to be charged and the repayments dates.
What do I need to apply for bad credit loans through a broker?
When applying for credit with CashLady you’ll require:
- Your home address
- Your employment details (such as your employer’s name, address and contact details)
- Your contact details (such as your email address and mobile number)
- A breakdown of your outgoings
- An email address to which you have access
- An internet enabled smartphone or touchscreen device
- A debit bank account
Do credit brokers charge for their service?
You, as a consumer, are not charged a fee by CashLady for the service of being matched to a lender. We recoup our costs from the lending partners we work with, in the form of a fee once you’ve successfully received your loan funds.
Why have I been offered a loan on terms different to those I requested?
Our lenders may choose to offer a higher or lower amount of finance than you’ve requested, as according to how they judge your affordability. Should this be the case, it will be clearly presented during the application process.
If I use a broker and I take out a loan, who will I deal with in future?
All of your future dealings will be with the lender. You’ll pay them directly and speak with them if you have a query or issue.
Using a credit broker for the first time can seem intimidating, however, it really needn’t be. For help with your application or to receive answers to your questions, contact the CashLady team using the phone number below or speak with us instantly via our live chat feature.