Should I Work With a Lending Broker or a Direct Lender?

This may be one of your most important decisions. Choosing the wrong option can lead to a lot of wasted time and missed opportunities. Should you work with a broker or directly with a lender? There are a number of key differences for each of these options, and there are advantages and disadvantages for each of them. We want to help you to make an informed decision so that you don’t misstep. Taking 5 minutes to read this article, as it will be beneficial to your financial health!

Whichever option you choose to go with, be sure that you continue to do your own research. We can only offer you our best advice however the ultimate choice is your own. Whether you choose a lender or a broker, be sure to do your own due diligence. If you find something fishy, look elsewhere. Without further delay, here’s what you need to know in order to make the right choice for your situation.

Lending brokers connect lenders with borrowers. You can consider them as a matchmaker of sorts. Brokers function as a middleman between you and your potential lenders. The broker does not use their own money to fund the loan, instead they act as a liaison between you and the lender. They do the legwork for you to make sure that you get your paperwork ready. They gather your documents, pull your credit history and verify your income and employment status. Using this information, they help you to apply for loans and negotiate terms in a short period of time.

Additionally, brokers help you to compare suitable lenders on your behalf and find interest rates that best fit your needs. Financial brokers have an array of lenders that they work with, which will make your life easier when you’re looking to find the right one. You may be wondering, what’s in it for the lending broker? Brokers receive a commission for their effort.

The primary advantage of working with a broker is that they can help you to navigate the complex landscape of choosing a lender. A broker can leverage their greater knowledge to help you get the best deal for your situation. This service is invaluable. It saves you time, effort and headache, allowing you to focus your efforts on the aspects of your business that truly matter.

Brokers typically work with a variety of different lenders and they can shop around for you to find the best option. Being able to reach out to a big pool of lenders is a major benefit because it provides you with the flexibility to find a lender that fully fits your needs especially if your credit is subpar. People sometimes struggle to get approved for a loan due to a poor credit rating. Finding a willing lender under these circumstances can be very difficult. Enlisting the help of a broker to find an appropriate product would be beneficial.

Having a broker look out for you, and accompany you along each step of the process will give you greater peace of mind. They will know exactly what information is required, as well as help you bypass mistakes and pitfalls to save you valuable time.

Get Competitive Rates and Avoid Multiple Hard Hits On Your Credit

When getting approved directly from lenders, your credit score receives a hard hit from each lender you apply with.  At Simple Lend, pre-approvals are done without impacting your credit score at all and your credit profile gets checked only once at the final stage of the application. That credit score is used with your credit profile to shop for competitive rates with multiple lenders without impacting your credit score. If you were to apply to each lender directly, your credit score would be negatively hit with each lender. Simple Lend can help you find the appropriate product for your circumstances especially if you’ve been met with resistance in the past. If you’re looking for a broker but you’re unsure of where to start, get in touch with Simple Lend. Click through to this link here.

Direct lenders are financial institutions that can lend directly to their borrowers without intermediaries. For example, banks, credit unions, and major lending companies are Direct Lenders. These institutions use their own money to fund their lending and are typically more stringent when it comes to picking their clientele.

 When working with a direct lender you should be aware that they employ their own in-house staff to help you through the lending process and will typically only recommend products from within their company’s offerings. When working with a direct lender, you apply directly through their company.

Working with a direct lender requires you to do more of your own research and due diligence in order to make the right choice. When working with a direct lender, your options are limited to the lender’s own products. As a result, the lending criteria can be considerably rigid. If you don’t meet their lending criteria, you may be out of luck because they may not have any other options to offer you.

Before you apply to any direct lender you should be thoroughly prepared. It requires additional effort to restart the entire process again and apply to the next lender if your approval gets denied in your first attempt. With every attempt that you’re not approved, each lender will have to make a hard inquiry into your credit record. Multiple credit inquiries can hurt your credit score and make it more difficult for you to borrow subsequent loans. Read more about how hard enquiries can affect your credit score here. Whereas working with a broker, they should have a pretty good idea of how you will qualify before doing any credit checks with a lender, hence saving your credit score from hard inquiries.

You should be aware that some direct lenders may be able to offer you deals that brokers cannot. However in order to find these deals, it will require additional time and effort on your part to dig through all the possible options. Unfortunately, you may still find that your efforts are ultimately wasted if the lender denies your loan request at the end.

Is it better to work with a lending broker or with a direct lender? Ultimately, you have to choose the option that makes the most sense to you. It depends on your personal circumstances. If you do your own research and you can dig up a good deal with a direct lender by yourself, you should go for it. However, for a lot of people time is not a luxury that they have, and effort is not a commodity that they want to spend. If you need someone to take care of your borrowing needs, then you should consider working with a lending broker.

Fully consider both options. You don’t want to waste your time and effort down the line or miss out on better opportunities because of your lack of due diligence. If you find yourself stuck between a rock and a hard place deciding between the two options, why not give us a call? We provide free consultations and we’re here to help.

Get in touch with a Simple Lend guide to help you get started straight away. Our professional team can help you through your process. Together we’ll find the right solution. A short phone call with us and you’ll be saving yourself hours of effort. Simple Lend has a professional team committed to helping people make the right borrowing choices to suit their needs. We can help you too.