You may not have heard of direct payday loans, but the term refers to when you approach the lender directly, rather than go through a comparison website, broker or some other sort of introducer. It may be easier to choose a payday loan if you are using a comparison website, but it is worth noting that there are advantages to going directly as well.
Representative Example: £400 borrowed for 90 days. Total amount repayable is £561.92 in 3 monthly instalments of £187.31. Interest charged is £161.92, interest rate 161.9% (variable). Representative 305.9% APR. We are a broker not a lender. We don't charge fees. We don't sell your personal information.
It is sometimes the case that a lender will pay commission to a comparison website, introducer or broker if they match them up with a borrower. This is standard practice and perfectly legal, but it can mean that if you sign up to a borrower that features on a comparison website, for example, you could be paying more. This is because the borrowers will have to cover the additional costs that the lender is paying out to the introducer.
It may be that they will not only be charging more for those that sign up through that introducer but also to people signing up directly through their website. This is because they are likely to keep their prices consistent for all customers, even if some apply directly and some do not. Therefore if you sign up directly to a company that is available on comparison websites, you could be paying more compared with other lenders.
It could very well be the case that payday lenders that only offer direct payday loans, could be cheaper than those appearing on the comparison websites or being recommended by brokers. This means that rather than just relying on these to help you to get the lowest price, you may need to be considering looking at other payday lenders that do not appear on these.
If you only look at lenders that appear on comparison websites and similar, then you may be restricting your choice with regards to payday loans. There is likely to be a range of lenders that only deal directly with borrowers and they could offer a lot more compared with the others. It is always wise to compare lenders when you are borrowing money, not just on cost but on other things as well, such as the reputation of the lender and how helpful they are. However, you do not always need a comparison website or lender to be able to make these comparisons, you can have a go yourself. This can be worth it because you know exactly what you are looking for in a good lender and so by researching yourself, you will be able to identify those features more easily.
If you approach a payday lender directly, then you will usually need to go to their website. The great thing about doing this is that you will get a chance to inspect the website. It should give you an idea of what the company is like, how professional and helpful they are and you can see if there is information about them on the site which you might like to read.
A company’s website can be like a small invitation to take a look at the company a bit more from the inside. You will be able to see how easy the site is to navigate, what you think of the design, find out about the products they offer in more detail and things like this. Most importantly you can check to see if the site is secure by looking for a padlock by the address line at the top of your browser. This will let you know whether you can trust them as without it, any data you send is not fully encrypted and therefore your information could possibly be intercepted. If you are giving out bank details, you want to be confident that the information is secure.
It is possible that if you go through a comparison website or similar then there may be some bias towards certain lenders. This could be because they pay more commission. This is of no use to you as you want a lender which will look after your interests rather than their introducers.