Options are there when you face any kind of financial trouble. The loan marketplace of the UK has a variety of loan alternatives available to solve your financial quandaries. However, it does not mean that you get approval every time. Mainstream lenders, like banks, have their specific rules and regulations. If you can qualify for them, you get the acceptance. Otherwise, these lenders will deny your application.
Suppose the traditional lenders have also denied you. Then, what would you do? What options do you have? When no other option is there, you can still have the route of direct lenders available. Yes, they are available online, and you can approach them without finding too much on the internet. However, these lenders do not have the leverage of higher reliability. Still, they are helpful in getting out of financial issues with no delay at all.
When it comes to loan options, direct lenders offer almost the same sort of loans as traditional lenders provide. It means you can find options like personal loans, unsecured loans, business loans, instalment loans and loans for the unemployed from a direct lender. The lending norms may be different but not tough to pursue. In this blog, we will discuss direct lender loans and in which situations they are more suitable.
Why direct lender loans only?
Direct lender loans are those funding sources where you get the loan approval directly from the lenders and with no intervention from any third party. These loans are mainly available for smaller amounts and shorter duration, but a few of them also provide long-term loans to needy people.
Loans from direct lenders are mainly available through the online procedure. The best thing is that they are available without submitting too many papers. The primary requirement will be proof of income. You just have to keep the documents ready, showing the strength and affordability of your earnings. You can scan their copies and send them by mail or alongside your loan application.
There is another reason why direct lenders only. They provide loans which are available beyond the impact of your past credit. It clearly indicates that people with any credit scores can apply. They have to show their loan affordability and then easily qualify for the loans.
Like these, many reasons are there proving the efficiency of direct lender loans. In the follow-up part of our blog, we will now discuss the circumstances where you have to go for these loans, not the traditional bank loans.
Situations forcing to go for direct lender loans
There are several scenarios where availing of direct lender loans becomes vital. To help in knowing them, we have summarised them in the given below lines:
* Unemployment
Situations like unemployment can happen anytime. Managing the financial balance between spending and saving becomes a challenge when you are in the stage of no job in hand. Therefore, you have to seek external funding sources to fulfil a goal or a need. Direct lenders can help you in this regard. They have specific options like loans for the unemployed.
These loans are mainly available for a shorter duration or until you find a new job. Online direct lenders provide the acceptance of these loans on the applicant’s part-time income or unemployment benefits that they receive.
* Bad Credit score
When your credit score is not in good condition or not capable of snatching the lender’s approval, you will struggle a lot. It is a clear lack of your financial creditworthiness, and no one can easily trust your affordability. It is where direct lenders show their usefulness.
Almost every modern-day lender has now kept specialised funding products for those with lower credit profiles. Therefore, one can easily find deals like bad credit loans or very bad credit loans from a direct lender. Despite higher interest rate, these loans are still effective to utilise in tough times.
* Start-ups
Bank loans have been preferable for most of the business aspirants. Since they need long-term funding for a longer term, they bend more towards the traditional lending sources. Still, in the UK, one can trust direct lenders to avail of short-term or long-term business loans. For instance, 24cashflow is among the trustworthy providers of small business loans, primarily for start-ups.
These loans are approved on the basis of your business plan, current income and future returns. Therefore, there will be no impact on your past credit performance.
* No collateral is there
There has been a trend in the marketplace. Individuals ready with an asset to keep it as loan collateral mostly go for mainstream lenders. What about those who lack the collateral? It is obvious that you go for unsecured loans. Moreover, direct lenders will be a more wise choice when it comes to unsecured lending.
The primary reason is that unsecured loans come online from a direct lender. It means you can get the funds early or on the same day. Sometimes, the lender may offer you unsecured loans with no guarantor requirement, too.
* Consolidating debts early
One word differentiates between direct lender loans and loans from mainstream lenders. It is ‘INSTANT’. Sometimes, you have plenty of debts to clear as you have not been sincere in making the payments, or the circumstances are such where you could not do the same.
If you need to consolidate your debts early, you can look for direct lender loans for debt consolidation. They can approve your loan application early online and allow funds to merge your debts into a single loan option.
Conclusion
The UK loan market does not disappoint anyone when it comes to availing of a loan in a specific financial situation. This blog has explained plenty of situations where you can depend upon direct lender loans. These loans not only come with a smooth loan application procedure but also give you benefits, mainly staying away from past credit scores.
You can approach a reliable direct lender who provides relevant loan deals whenever you have lost the grip on your credit ratings or your regular job. In a nutshell, loans are there, and direct lenders will help you, but your efforts should be in the right direction. It means you should apply for loans when you have no other option.
Anna Johnson has more than 11 years of experience in direct lending industry of the UK. She is the Senior Content Editor at 24cashflow where she is leading a large team of loan experts. During her career, she has helped the loan aspirants to use the particular loans in the best way and improve their financial lives and status.
Anna Johnson is known for her in-depth research of the UK loan marketplace, as she has worked with many major lending firms in her career. During her educational phase, she has done a research on ‘Finance Fundamentals for Growing Business’.
