Are There Any Online Payday Loans From Direct Lenders Without Third-Party Involvement?
Consumers who have small-dollar emergencies and may not have alternative financing options such as borrowing from the equity in their home, tapping into a credit card or asking family for assistance, can opt for a payday loan. Unlike traditional short-term loan lenders that may require that borrowers go to a check-cashing location, pawnshop, or independent financing company, more payday loan lenders are offering direct online options for borrowing. The downside of many of these fast payday loans online, however, is that they may be advertised through third-party lead generators or broker sites that can make the borrowing process more difficult. Consumers should make sure they are working with licensed lenders and brokers before applying for a payday loan online.
Why Payday Lenders Work With Third Parties
Consumers may wonder why direct online payday loan lenders would need brokers or lead generators if lenders could simply set up their own websites. There are a few reasons why this might be appealing to lenders:
- Loan companies might be able to get increased business from partnering with a broker
- Lenders can have different terms on their payday loan requirements than what the third-party advertiser may imply, and some may hope borrowers do not read all of their fine print
- Lenders may be looking for specific types of borrowers and may feel that third party brokers will help them find these borrowers much easier
Therefore, while third-party lead generators may be useful for finding payday loan lenders, borrowers should be aware of the dangers of working with third-party lenders who may not be licensed and who may participate in predatory lending practices.
How To Check On The Legitimacy Of Online Payday Loans Direct Lenders
Borrowers should also note that some online payday loans direct lenders have websites that are run by third parties who may have the appearance that they are a direct lender. Further, some lenders might operate multiple stores in multiple states, and their online pages may have some similarities to a third-party website. So what are the ways to tell them apart?
- The most trusted payday loans online will not offer false or blatantly misleading loan qualifications
- Online lenders can still have physical locations that borrowers may want to confirm
- States, where payday loans are legal, will usually have a list of registered payday lenders which includes online businesses
Often, the most misleading service advertised by third parties is “payday loans online no credit check“. Some other misleading or false advertising may include phrases such as “payday loans online direct lenders only no teletrack”, or “same day payday loan approval here”. Potential borrowers should note that there are no cases of “instant payday loans” nor are there instances where a lender will not check an applicant’s credit score and history.
To this end, most online payday loans direct lenders do not necessarily offer short-term loans to applicants who have poor credit. Like is the case with traditional loans from banks and credit unions, lenders will in fact consider an applicant’s credit score in determining their loan eligibility. Some lenders may also consider an applicant’s debt to income ratio to ensure that the borrower will be able to meet loan terms and conditions.
Borrowers who have lower credit scores are still eligible to apply for shorter-duration funding options to see if they are approved.
Other Factors Borrowers Should Look At For Determining The Best Payday Loans Online
Borrowers should only apply for a payday loan from confirmed and legal lenders in their state. This should especially be done for states that have tighter restrictions on how short-term loans can be offered. Many of the state laws in place are necessary to prevent predatory lenders from taking advantage of unknowing borrowers.
Consumers who go to a legitimate lender’s website can see their state licenses, their credit requirement information, and information regarding interest rates. Consumers can also look to see if the lender in question has a physical store in their state, in addition to checking the state’s legal codes to see if the financial authority has a complete list or database of lenders.
Those who are interested in applying for a payday loan should be aware of all the rules and regulations regarding short-term lending in their respective states.