• July 3, 2019
  • admin

Many lenders don’t offer a loan to someone who has a poor credit score as they think the risk is very high. You might have bad credit ratings owing to earlier non-payments of loans, credit cards, or other credit obligations. If you have a very high level of credit in your name currently then it is very unlikely to get another loan at that time.

A bad credit loan is an option available to you even if you have an adverse credit record. It is perfect for someone who has been miserable in their credit management in the past, in turn having a poor credit score, but who is now in a well-secured situation to manage their financial obligations. If unanticipated expenses arise and need immediate paying, an unsecured loan from direct loan lenders will be of much help.

What is a Direct Loan?

A direct loan is a type of loan made directly from a lender to a borrower without the involvement of the third party. In simple words, an institution provides a loan to a borrower directly.

What are the advantages?

One of the main advantages of opting for a direct loan is you don’t have to pay any broker charges. A third party or broker can be helpful when you are looking for a large loan since they can find the best deal, but for a smaller loan, the fee you will pay to broker outweighs the benefits. In addition to that, applying for it is faster than applying through a middleman. Owing to the fact that when you deal directly with a lender you can find out instantly whether your application has been accepted and they could be able to give you funds.

How does a Direct Loan function?

Applying for a direct loan is very simple. You only need to contact the lender and tell them how much you would like to borrow and for what duration. They will then tell you the total amount you need to repay them including interest.

Since it’s a direct loan, you only know the lender you are applying to, not the broker or any middleman. Once your application is accepted, the lender can send the money directly into your bank account.

Since it’s a direct loan, you only know the lender you are applying to, not the broker or any middleman. Once your application is accepted, the lender can send the money directly into your bank account.

Unsecured Loans: The Most Useful Feature of Direct Lending?

Unsecured loans mean that medium of funds where borrowers don’t have to keep their valuable assets like house, car, etc as collateral. Nonetheless, lenders still require some guarantee to get their money back, and therefore they charge high interest or prefer to give loans to those who have an excellent credit score. There is no need to protect the loan and the acceptability depends on income, age, and residency.

What is the difference between Secured and Unsecured Loan?

The borrowers have to decide whether they want to apply for a loan with less-than-perfect credit through secured or unsecured medium. Firstly they have to examine their financial situation and based on that make a decision. However, to guide them a small differentiation has been given below.

Secured Loans:

  • It is a critical way of borrowing money by using your assets like house, car, etc.
  • This option is suitable only when a borrower is in need of a high amount.
  • In this, the rate of interest is low due to the involvement of collateral to manage the loss if any occurs in the future.
  • More preference is given to people with good credit ratings and employment status.
Unsecured Loans:

  • You can get the unsecured loan without presenting any collateral.
  • These are suitable for small term financial needs in case of a financial emergency.
  • The unsecured loans have a comparatively high rate of interest due to not so good credit score and absence of collateral.
  • These are also available for unemployed due to the lesser amount.

Hence, if you are in a dire need of financial aid but unable to get due to your adverse credit record in the past, getting an unsecured loans with bad credit from a direct loan lender is the best option available for you. There are many online marketplace lenders who will help you in this regard.