Brokers and direct lenders have many things in common. Both of them conduct campaigns of advertising for attracting customers and both of them collect information on your financial status in order to decide whether to lend you money or not. Both can also help you to get a better understanding of the lending process and clarify any legal aspects to you. However, there are some differences between lenders and brokers that you need to know.
Knowing the difference will allow you to decide which option to choose the next time you are applying for a loan. Although the decision you make will not negatively impact your ability to receive a loan, understanding their roles in the application process will help you understand the process you have chosen to undertake.
The Broker’s Role and Responsibility
Brokers offer their services to help you find a loan that best suits your needs. They are the liaison or the go between the customer (the person looking for a loan) and a lender (bank or short-term loan company). They can work with a variety of lending sources which can be beneficial for shopping for the best rates available. With a broker, you will fill out a normal application, over the phone or online and then the broker will pass your information to the lenders they work with in order to find you a loan that meets your needs. They may do this by filtering out the lenders that don’t meet the criteria or by simply passing your application in a secure way to them so that they can decide if you are eligible to apply for a loan or credit card.
The Lender’s Role and Responsibility
If you’re searching for ‘payday loans direct lenders‘, the lender is the company that gives you the loan. They are usually a single lending source; you would apply for a loan directly from them, without a broker. This is accomplished by contacting the company and applying for the loan in person, over the phone or online, you will be the party responsible for providing the information necessary to complete the application.
Direct payday lenders will aim to pay out your loan, if you’re accepted, in as little as an hour. If you are declined then they may be able to pass your information to other lenders who may be able to help you. If you are declined for a loan, however, it would be a good idea to get a copy of your credit report so that you can see why you may have been declined. You should also think carefully before applying for another loan.
Brokers and Lenders Making Your Choice
Now that you know the difference between brokers and lenders you will be able to make an intelligent decision based on your needs. The use of a broker can save you time and confusion simply because they understand all of the nuances of their industry while going directly to the lender offers direct contact with the lender and gives you more power to make your own choice. It comes down to how much control you want to have during the process and how comfortable you are in handling its completion.
Brokers are available to help you find the right loan for you. They usually will have a pool of lenders to choose from and will decide based on their expertise the best choice for you. Going directly through a lender will give you more power over the process, if you are planning to reach out to multiple lenders this can be time-consuming, however, depending on your outlook it can be considered worth the effort since you will be the person who is responsible for repayment.
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Mortgage Lenders vs Brokers
These rules may apply to short term loans, but what about mortgage brokers?
As we’ve discussed, direct lenders represent a single lending source while brokers may represent various lending sources. Brokers are intermediaries between several lenders and you. Using a broker is like using a bridge for shopping around in order to find the best interest rates. However, using this bridge may also consume your time for obtaining a loan. This is particularly true when it comes to a mortgage.
There is a considerable difference in rates of interest when working with a lender or a broker even though all of them take their rates from the same place that is the secondary market. Brokers have access to lower rates of interest because they do all the work related to the loan, from generation to qualification to submission to closing. A lender will have two or three people working inside the bank and helping him to obtain the loan for you. These people will ask money from the lender for their help.
Lenders use specific program parameters to set their guidelines. They will either approve or reject your loan with no or less alternatives. A broker can find the program that meets the specific needs of your loan and submit it to the appropriate lender with certainty that the selected lender will approve your loan. Therefore, brokers will not waste your time by submitting your application to a lender who will reject it after the approval process. Since mortgage brokers are independent, they can make quick decisions about the way they can reduce your costs. However, you need to have a high credit score in order to gain more power in negotiating with them.
According to your needs and situations, you can choose to work with a mortgage broker or find direct lender loans.Apply Now!