Direct Lenders

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What is a Direct Lender?

When searching for a loan, it is important to understand the difference between a loan broker and a direct lender. A direct lender is just like it sounds: a direct lender is the bank or financial institution backing the loan and ultimately decides who will or will not qualify for a loan. The direct lender takes on the risk of lending to the borrower, whereas a loan broker makes a commission of each loan that is funded by the lender, removing all risk from the loan broker as their money is made up front once the loan is originated. 

What is a Broker?

Brokers are not lenders, they do not provide the money backing the loan. Loan brokers act as a middleman between the lender and the borrower to help set up the loan and perform some of the marketing to bring customers into the lender’s portfolio. This is very common in the mortgage industry. Many mortgage brokers provide loan officers who find potential borrowers, help them understand if they will qualify for a mortgage loan, and match borrowers up with banks who invest in mortgage loans. Loan brokers are very common in the personal loan, signature loan, and title loan industry as well. Make sure to look for legal jargon towards the bottom of the page, most brokers will state “we are not direct lenders” or “we do not offer loans”. It is important to know who will be financing your loan.To apply for a personal loan from a direct lender, click here to apply with

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