While Brokers and direct lenders both work for the same outcome, there are some notable differences between the two that you should take into account when applying for a short-term loan. The method that you opt to choose when applying for a payday loan is entirely up to you and each type has its own positives and negatives. Being aware of the differences between a direct lender and a broker can help you make an informed choice when looking at obtaining credit. Sure Money UK is one of the UK's most trusted payday loan brokers and we aim to be as clear and upfront as possible while helping you obtain the much-needed finance that you are searching for. So, what exactly are the differences between a broker and a lender and what exactly is a ping tree?
What is a direct lender?
When it comes to obtaining a payday loan from a direct lender, the clue is in the name. A direct lender is a company that you deal with directly, and who has the ability to either accept or decline your application for a short-term loan. While applying for a payday loan with a direct lender can give you an immediate decision on the outcome of your application, it can be more difficult to obtain credit as they tend to be stricter with their lending requirements. It is important to remember that if you are declined by a direct lender that applying for credit with another direct lender in a short space of time can adversely affect your credit report.
As with all regulated lenders, your information will be kept private and confidential at all time and no upfront fees will be charged to make an application. A thorough search of your credit history will be performed, which leaves a heavy footprint on your credit file. If you are approved for credit, this is not a problem. However, if you are declined, then the footprint is noted along with the information that you have been declined for credit. This all serves to worsen your credit report and can make obtaining credit in the future much more difficult. If you have a good credit history and are able to demonstrate that you can make repayments on time, then a direct lender is most likely to approve your application.
What is a payday loan broker?
For those with a bad credit history or who do not want to deal with a lender directly, a payday loan broker, such as Sure Money UK is able to match you with lenders quickly and easily. A payday loan broker is a fantastic option for those who would like to compare short-term loans but do not have the time or patience to do so themselves. The best way to look at a broker is to see them as a middleman, someone who has complete expertise and knowledge of the markets and who can perfectly match you with the credit that you are searching for.
Brokers are also the best option for those who have a poor credit history. By working with a panel of lenders, a payday loan broker is able to help secure the finance that you so desperately need in a short amount of time. This is where the elusive ping tree comes into play, which we will discuss in more detail below. While some brokers do charge upfront fees for using their services, Sure Money UK does not, making the entire process not only more affordable but also quick and simple. With a direct lender, you have to approach each lender individually. Whereas with a broker, multiple lenders can be approached at any one time thus increasing the likelihood of obtaining the payday loan that you need.
What is a ping tree?
A ping tree is a system used by short-term loan brokers, such as Sure Money UK. A ping tree system basically allows payday loan lenders to place a bid on loan applications that fall within their lending target market. This is all done in real time, which means that many decisions are instantaneous and typically take a maximum of 30 minutes. Those lenders who place the highest bids get to make an offer to the applicant. The lenders at the information relevant to what they prefer in a customer, with potential customers being selected by those willing to provide them with finance. Once A lender has decided to give you credit, you will be directed to their website to finalise it.
Ultimately, the method that you choose to use is up to you. Now you know the difference between a broker, a direct lender, and what a ping tree is you can better secure the finance in a way that you feel more comfortable with.