24th January 2015
The Lenders List only works with direct loan companies, we do not work with brokers. The description below provides an explanation of the difference between a lender and a broker and to how to spot a broker amongst the lenders.
A payday loan direct lender is one that transfers the funds directly into your account. Payday loan borrowers typically borrow up to £1,500 and repay on their next pay date. By working with a direct lender, the customer will fill in their details directly on the lender’s website, correspond directly with the company via phone or email and when successful, the funds will be transferred directly to the customer’s account. When it comes to repayments, the money will be collected directly from that lender.
This process is different from working with a payday broker. This is different to a payday loan broker who will encourage a customer to fill in the details on their website but once complete, they will recommend them to a direct lender sometimes taking a fee from the lender and the customer for making the introduction. The fee that is sometimes automatically taken from the customer’s account and ranges from as little as £5 to as much as £70. This fee may be taken without a loan actually being granted to the customer, they are essentially for the service to be recommended to lots of other lenders. In some cases, an individual who applies with a broker will have their details shared with lots of other brokers and similar payday companies – causing the customer to be bombarded with phone calls, text messages and emails.
Since customers are visiting payday loan sites in order to obtain short term funds, the last thing that they want is to have unsolicited fees taken out of their account and their personal information shared. With this in mind, The Lenders List offers a short guide to allow customers to spot a payday loan broker when applying for a short-term loan. Whilst this is not always easy, there are a few common traits.
Fee up Front – Brokers may take a fee up front of up to £70 for simply applying. This may be mentioned in the small print but your loan will not be guaranteed as you will simply be put in touch with other direct lenders that you could have found on Google or The Lenders List for free. Ways that brokers might present this are as a ‘Membership’ up front and once you have signed up, you will receive emails with recommendations of different lenders to use.
100% Guaranteed or Accepted – A broker may say that they offer a guaranteed successful loan. However, responsible lenders in the high-cost short-term loan industry should not be able to guarantee you a loan without running any proper credit checks or affordability checks. The way they might be able to justify selling a guaranteed loan is if the customer is declined and their ‘lead’ is sold enough times, they may eventually find a loan although this might incur fees and put their personal data at risk.
Our panel of lenders – by mentioning that they work with ‘a panel of lenders’ on their site suggests that they are not a direct lender but a middleman who can put you in touch with direct lenders. By understanding the terminology a bit better, you will be able to differentiate between a payday loan broker and lender.
The small print – a lot of us ignore the small print but having a quick check of the terms and conditions before you complete your loan application will be able to tell if there are any fees for applying and whether the loan company is indeed a broker. This information can be found in the information next to the box you have to tick before completing the application or on the footer of the page in very small print. If it is not obvious that the website is a lender or a broker, there is no harm simply sending an email to the website or ringing them on the phone to find out more.
The Lenders List is an online comparison directory and we do exactly what we say on the tin – we are a ‘list of lenders.’ But most importantly, we only work with direct lenders, those companies that will directly transfer the loan to your account and they won’t take any fees from your account for applying. When it comes to applying for a payday loan, you want to make sure that your details are handled securely and confidentially and that they are not be passed onto several different companies who may take a fee and overwhelm you with messages. That is why we ensure that every lender we work with has a consumer credit license, is registered to offer loans in the UK and follows the strict regulation of the Financial Conduct Authority.