Direct lenders offer short term loans directly to consumers, while brokers act as intermediaries and charge fees without guaranteeing a loan. In the past, short term lenders engaged in predatory practices like charging interest for the full term regardless of how long a loan was held, imposing large fees, and making it difficult to pay off balances. However, regulations have improved standards, making direct lenders a better option than brokers for short term borrowing needs.

1. Direct Lenders –
What They Offer

2. THERE ARE DIFFERENT TYPES OF LOAN LENDERS
OPERATING WITHIN THE SHORT TERM LOANS
MARKET. THEY VARY IN THE TYPE OF PRODUCT THEY
OFFER AND ALSO THE ACTUAL SERVICE THEY
PROVIDE. IT IS IMPORTANT TO UNDERSTAND HOW
DIRECT LENDERS CAN PROVIDE A VERY DIFFERENT
SERVICE TO OTHER LENDERS OF A SEEMINGLY
SIMILAR NATURE.

3. THE CONCEPT OF BORROWING FROM A SHORT TERM
LENDER IS NO LONGER AN UNCOMMON
OCCURRENCE WITH MANY CONSUMERS REGULARLY
USING THIS MARKET TO SATISFY A MONTHLY
REQUIREMENT TO BOOST INCOME. SEVERAL YEARS
AGO THE IDEA OF USING SUCH A LOAN WAS
UNHEARD OF UNLESS THE SITUATION WAS
CONSIDERED EXTREME AND THE CONSUMER HAD
‘NO OTHER CHOICE’.

5. THANKFULLY AS TIME HAS PASSED AND THIS TYPE OF
LENDING HAS BECOME MORE PUBLICLY
ACKNOWLEDGED, THE UNDERSTANDING OF WHAT IS
ON OFFER IS GROWING BUT AS I’VE SAID THERE IS
STILL A WAY TO GO BEFORE THE CONSUMER TRUST
IS FULLY SECURED.

6. SADLY THE MORE POPULAR PRACTICES OF SOME OF
THE OLDER AND DATED LENDERS MEANT EVEN THE
DIRECT LENDERS WERE BRANDED AS EXPENSIVE
AND NOT CONSUMER FRIENDLY IN THE PAST AND
FOR THE MOST PART THIS WAS VERY MUCH
JUSTIFIED.

7. IN THE PAST THE PRACTICES OF THESE LENDERS
WAS SHOWN TO BE AGGRESSIVE AND NOT IN
KEEPING WITH THE UNIVERSAL UNDERSTANDING
THAT A CUSTOMER SHOULD BE, AT THE VERY LEAST,
TREATED FAIRLY.

9. THESE LENDERS DEMONSTRATED PRACTICES WHICH
WERE LESS THEN FAVOURABLE WITH IT’S
CUSTOMERS AND ULTIMATELY HELPED TO FORGE
BETTER REGULATIONS AND GUIDELINES WHICH
NOW FORM THE BASIS OF THE MARKET NOW IN
EXISTENCE. IN THE PAST THE ONE MONTH LOANS
ON OFFER WERE EXPENSIVE AND TOUGH, LET’S
EXPLORE WHY.

10. WHEN THE MARKET FIRST EXPLODED INTO LIFE
ABOUT 8 YEARS AGO THE LENDERS OF THE TIME
WERE IN CONTROL AND THANKS TO PROVIDING A
MEANS TO AN END (WHICH WAS THE CASE FOR
MOST CONSUMERS USING THEM) WERE ABLE TO
SET THE STANDARDS OF THE PRODUCT AS THEY
WISHED. THIS MEANT THINGS LIKE THE COST WERE
IN THE COMPLETE CONTROL OF THE LENDER. AN
EXAMPLE OF THIS IS HOW THE INTEREST WAS AND IS
TYPICALLY BILLED TO A ONE MONTH LOAN.

11. IN MOST CASES THE LENDER WOULD CHARGE A
STANDARD AMOUNT OF INTEREST FOR THE
AMOUNT BORROWED; WITHOUT TAKING INTO
ACCOUNT THE PERIOD OF TIME THE FUNDS WILL
ACTUALLY BE BORROWED FOR. GIVEN THAT SUCH
LOANS, AS THE NAME SUGGESTS, REQUIRES
REPAYMENT TO BE MADE ON THE FORTHCOMING
PAY DATE, THIS MEANT A CUSTOMER WITH THE
LOANS 15 DAYS WOULD PAY EXACTLY THE SAME AS A
CUSTOMER WHO HAS THE LOAN FOR 30 DAYS.

13. THERE WERE OTHER SOMEWHAT UNFAIR COSTS
ASSOCIATED TO THESE LOANS, NAMELY FEES, OFTEN
THERE WAS A FEE FOR APPROVING OR DEPOSITING
THE LOAN, SUCH AS A £10.00 FEE IF A CONSUMER
WANTED THE FUNDS THE SAME DAY. OFTEN
LENDERS WOULD OFFER AND IN SOME EXTREME
CASES AUTOMATICALLY EXTEND A CONSUMERS
ACCOUNT AS WELL.

14. AN EXTENSION MEANT ONLY THE INTEREST
APPLICABLE WAS PAID AND THEN THE FULL
BALANCE, INCLUDING ANOTHER MONTH’S INTEREST,
WAS THEN DUE ON THE SUBSEQUENT REPAYMENT
DATE. THIS WOULD MEAN CONSUMERS COULD FOR
MONTHS ON END MAKE REPAYMENT AND NEVER
ACTUALLY REDUCE THE AMOUNT THEY OWE.

15. ALL IN ALL THE LOAN PRODUCT CLEARLY BECAME
DATED AND NEEDED SOME INTERVENTION FROM
GOVERNING BODIES TO ENSURE WHERE THE
PRODUCT WAS STILL BEING OFFERED, IT WAS FAIR
AND CONSUMER FRIENDLY. THESE ARE JUST SOME
EXAMPLES OF HOW THE PRODUCT ITSELF CAN
OPERATE BUT AS I SAID IT IS ALSO MASSIVELY
IMPORTANT TO UNDERSTAND OF THE REMAINING
LENDERS, WHO SHOULD BE USED BY CONSUMERS.

17. THE FUNDAMENTAL DIFFERENCE BETWEEN A
DIRECT LENDER AND BROKERS ARE THAT DIRECT
LENDERS ARE RESPONSIBLE. THE OTHER LENDERS
AVAILABLE TEND TO BE LOAN BROKER. A BROKER
WILL ASSESS THE INFORMATION SUPPLIED IN THE
APPLICATION AND THEN SUGGEST OTHER SUITABLE
LENDERS; WHO HAVE ALREADY PREVIEWED YOUR
INFORMATION IN MOST CASES. THE BROKERS ARE
IN EFFECT THE ONES TO AVOID. THEY WILL
TYPICALLY CHARGE A FEE FOR THEIR SERVICE AND
THIS ‘SERVICE’ DOES NOT EVEN GUARANTEE A LOAN
WILL BE GRANTED.

18. THE FEE CAN BE UP TO £80.00 AND THIS IS
CHARGED AT THE POINT OF THEM SUBMITTING THE
SEARCH TO FIND THE CONSUMER A SUITABLE LOAN,
A COSTLY OPTION FOR SOMEONE WHO IS IN NEED
OF A SHORT TERM LOAN IN THE FIRST PLACE.
ULTIMATELY I THINK IT IS IMPORTANT CONSUMERS
ARE AWARE OF THE FACTS AND ARE ABLE TO MAKE
AN INFORMED DECISION REGARDING THEIR
BORROWING NEEDS, STICKING TO THE DIRECT
LENDERS WILL HELP IN THIS PROCESS.

19. For More Information:
www.pacific-odyssey.co.uk

20. Thank You