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Direct Payday Loan Lenders: Can Non-Direct Lenders Compete?

Direct payday loan lenders seem to be popping up everywhere. Whether you intend to visit a payday loan store in person or plan on applying over the internet, understanding the rates, terms and policies of the company you’re considering is paramount.  There can be substantial difference in the way payroll loan companies perform. Not the least of which is determining whether they’re a direct payroll loan company or an indirect one.

Making your solutions simpler with a direct payday loan lender

Direct payday loan companies are regulated by state law. While state licensing requirements may differ, all direct payday loan companies must adhere to the minimum standards established by the state in which they operate.  Applicants considering a direct payday loan should take time to shop around for the lender with the competitive rates, terms and repayment policies. Hidden behind the obvious are an increasing number of companies which promote themselves as payroll loan businesses yet actually aren’t.

These businesses sometimes referred to as “loan aggregates,” are actually “lead generators”. They review your application and then sell it for a commission to a lender or group of lenders they maintain an affiliate relationship with.  In these instances, the business you’re applying to can’t make a credit decision. They won’t be the company you’ll be borrowing from if you’re loan request is granted and you proceed with your loan.

While loan aggregates or indirect lenders as they prefer to be called, aren’t necessarily unreliable, understanding what they can and can’t do is important.  Many direct payday loan companies prefer to use loan aggregates because they usually have a high degree of marketing experience. As a result they can be quite successful directing customers to a lender, leaving the direct payroll loan company doing what they do best … make loans.

Loan aggregates also argue that they can actually save the borrower money by approaching more than one affiliate.  They may say they can even direct your application to a second lender should you be rejected by the first.  Moreover, some direct payday loan companies feel they save by not having to advertise for payday loan customers. That savings can actually be less than the commissions they pay the loan aggregation for doing it for them.  Nonetheless, borrowers should know that loan aggregates are not licensed loan brokers.

Unlike direct payday loan companies who will actively promote they’re licensed, indirect ones, publish a disclaimer that clearly states they aren’t.  Moreover, the loan application you’ll be completing will also state the company you’re applying to will not be making a credit decision on your loan request. Should you proceed, they will not be funding your loan themselves.  Taking the time to review their privacy statement and disclaimer is important. If you’re still unsure who you’re dealing with, ask.

By taking a little time to research the companies you’re considering doing business with, borrowers can avoid a lot of confusion and disappointment.  Even though you might be experiencing the stress of an unexpected bill or obligation, a few minutes invested prior to proceeding with your direct payday loan can relieve a lot of stress afterwards.


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