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Finding Loans with Direct Lenders in the United Kingdom

Lenders are basically financial institutions that lends money to individuals who need to borrow one. This is what you call a loan where the borrower has to pay it in full amount along with the interest costs on top of the principal amount of the loan. The borrower pays the loan amount in installments over a given period time or the term of the loan. If you’re interested in getting a loan, here are the top three most common places to get a loan.

Banks

One of the most common lenders that issues loans would be banks. They’re the very same that issues credit card accounts to clients. Banks, as opposed to the other two in this list, are generally considered to be more restrictive when it comes to terms and conditions. They take into heavy consideration your credit score which allows them to assess your risk. If you want to apply for a loan in a bank, it’s best to make sure you maintain credit score.

Credit Unions

Credit unions are typically community-based. As opposed to the former, credit unions are usually more lenient when it comes to terms and conditions. Since credit unions are based in a community, there’s usually a sense of belonging in credit unions. They’re more inclined to take a look at alternative sources of information such as your source of income instead of your credit score.

Peer to Peer Lending Platforms

Much like credit unions, peer to peer lending platforms are more flexible and lenient when it comes to terms and conditions. This option is an excellent one if you have a not so good credit score. The good thing about peer to peer lending platforms is that it allows borrowers and lenders to have a direct relationship since these platforms help match a borrower to a lender. The investors which act as lenders can assess the risk of the borrowers and borrowers can verify on their own the credibility of the lender.

How Direct Lenders Make Money On Loans

From time to time, you may find yourself wondering how banks and financial institutions get to earn money exactly by lending you money. Institutions like them actually play an essential role in our economy. And contrary to popular belief, no, banks do not keep an unlimited amount of cash in their secret vaults. Instead, these are the three ways that lenders can make money from lending you money.

Interest

The first thing that will probably come to your mind would be interest rates. This is one of the main ways they get to earn money. Any bank is free to set their own rates but several factors have to be taken into consideration. For example, banks have varying degrees of interest rates which serve as a competition. There is also inflation which banks have to consider when charging an interest rate for a particular loan.

Bank Fees

The next way they get to earn fees is through additional fees. These fees are also one of the main things borrowers have to be wary of. As an example, when applying for a loan, more often than not, there’s an application fee that you have to pay. Sometimes, it’s on hand and sometimes it’s calculated with the principal. In addition to that, there’s also a penalty that you may need to pay when for example, you fail to make your payment within the given due date.

Investors or in Essence, You

When you make deposits into your accounts, you are essentially lending your money to the bank. This deposit of yours that you lend them is paid with interest, hence your money in the bank grows over time, as well. However, aside from bank deposits, there are also the investors themselves who really do give banks full access to their money, for a given time frame.

Direct Lender Loans for People with Poor Credit

Under normal circumstances, borrowers with poor credit are unlikely to qualify for conventional loan services. Because of the credit scoring system that the lending firms have in place, borrowers in less than desirable financial circumstances are always at a disadvantage. With a credit rating system in place, poor credit scores are given to those whose income levels fall short of what the lending firms have prescribed as the only allowable minimum, while a history of bad payment is reflected on the records of those who fail to make their repayments religiously. Due to these circumstances, borrowers with a history of poor credit are often disqualified from procuring any type of loan from any of the well-established lending institutions. Because of this, many borrowers with bad credit try to address difficult financial circumstances by availing of underground loan services. The problem, however, is that while these types of lending services allow borrowers the temporary monetary relief that they need, these often come in inordinately high interest rates that often lead borrowers to a cycle of even worse financial circumstances. But with the innovative new financial options that are now available even to borrowers in bad credit situations, securing loans is no longer a problem. With loan services like quick loans for bad credit, borrowers now have safer and better alternatives in times of difficult financial crises. To get a quik loan for bad credit, borrowers need only visit the page of their preferred lending firm over the internet, fill out the application form, and submit all the necessary requirements needed. To avoid the risk of unnecessary delays and the outright rejection of loan applications, however, borrowers are stronly encouraged to first ensure that their application forms are duly completed, and that the necessary requirements have been properly uploaded, before all these are finally submitted.

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