Handling multiple debts is a big challenge. Due to financially challenging modern life, it has become common to fall prey to multiple debts. But the good thing is that debt consolidation loans handle debt burden efficiently. They merge multiple debts into one debt and you pay one monthly instalment, in place of many instalments.

Direct lending for debt consolidation

In the last few decades, an alternative to mainstream lending has come in the form of direct lending. If you have borrowed money, you must be knowing a little about direct landing.

There are many factors that inspire new-aged borrowers to trust debt consolidation loan from a direct lender. Let us try to understand why a direct loan provider company is important for debt consolidation loans?

What are direct lenders?

Direct lenders are private finance companies that provide loans to borrowers directly without any interference from brokers or third parties. They have some characteristics.

  • First, they offer funds directly. Whenever you apply for a loan, you are directly in contact with the lender throughout the loan process
  • Second, being private lenders, they control their repayment terms, rate of interest and eligibility criteria to a large extent.
  • Third, they fund through their money. They use their own money to provide loans to borrowers.

Online companies are the most relevant example of direct lenders.

Key benefits of taking debt consolidation loans from direct lenders

For many reasons online lending companies have become the first choice of fund applicants for debt consolidation. Let us know what are the potential reasons.

Flexibility in terms

One of the biggest reasons to choose direct lenders is their flexible loan policies. This flexibility is mostly unavailable in case of mainstream lenders.

  • More custom loan packages - Online lending companies easily offer custom loan packages which are not possible in traditional lending. Due to this, the loans are affordable and budget-friendly.
  • Flexible repayment options - Repayment options are also multiple due to customer packages. Repayment schedules are planned according to the individual worker's payment capacity.
  • Negotiable terms - Being a customer focused policy, borrowers can easily negotiate the rate of interest, instalment and tenure. Due to direct communication with the lender, it is easy to get the deal done without any interference and extra cost.
  • Tailored to customer needs – Loan applications are processed according to the financial conditions of each individual. Hence, it is easy to tailor loans as per the requirements of the customers.

Lower rejection risk

Direct lending has a high approval rate. Due to customized deals, loan applications of majority of borrowers are approved. Many other factors also play an important role in this.

  • Acceptance to limited credit history -You do not need a long credit history to get a loan from a direct lender. You can easily borrow funds even with a limited credit history. For this reason, many people with limited payment history are able to get approval for a loan.
  • Approval to bad credit history - Irrespective of credit history, you can apply for funds. If your repayment capacity is strong, you can apply for a loan even with bad credit situation.
  • Approval on Individual repayment capacity - Whereas mainstream lenders apply the same loan policies, making it difficult to get approval.  Individual financial conditions are considered in direct lending.
  • Less strict eligibility criteria – Despite bad credit, borrowers do not need to provide guarantor. Online loan providers follow flexible eligibility criteria. It is possible to get a loan irrespective of credit score status and employment status.

Additional perks

By taking loan from online loan providers, you get many additional benefits which are not available from mainstream loan companies. This is the reason why people are giving priority to online loan solutions during financial crisis.

  • No Early repayment fee - If a borrower makes early repayment of his loan, he does not have to bear the cost of any charges. Due to this, he can get rid of his loan before time.
  • Credit building opportunity - People who apply for a loan with limited credit history or poor credit history can improve their credit record. Due to the affordable instalments of online loans, making timely payments improve the credit history rating.
  • Free quote through soft check - Before actually applying for a loan, it is often necessary to know the approximate monthly and total cost of a loan. For this, it is possible to get a free loan quote without credit check without any fear of search footprint.
  • Better borrowing experience -Features like customer friendly loan policies, customized deals, instant customer support etc. online providers offer a better buying experience.

Long-term relationship benefits

Online loan providers give a lot of importance to the long-term relationship with their borrowers. Hence, they offer better services to their existing customers by providing various additional facilities.

  • Better deals for loyal customers - Customers who stay with a direct lender for a longer period of time are offered better deals. Be it lower interest rates, flexible payment schedules or bigger loan amount. Always get better options.
  • Easy to refinance - It is quite easy for existing customers to refinance their current debts. Both can be refinanced easily at lower rates of interest and smaller instalments, especially if they have maintained a good payment history.
  • Faster fund deposit based on payment history - If you repeat the same existing lender for a new loan, faster fund deposit happens. It is based on the payment history. Hence, in times of any need, borrowers can depend more on their existing direct lender than on a new lender.
  • Faster repeat loans - Just because of being familiar with financial conditions of exiting borrowers, it is possible to provide repeat loans easily.  Whenever a borrower is repeating the lender, lower rate of interest and affordable loan options are there.

Simplified loan process

The strength of direct lending lies in its simplicity. Whenever a borrower applies for a loan, getting approval in the shortest time without any paper documents is simpler. Many factors play a role in ensuring this simplicity.

  • Faster document review- The documents are reviewed very quickly. Due to this, those who apply for urgent financial requirements get the funds in their account in a very short time. Important factors like instant approval decision and speedy fund deposit play vital role in this.
  • Single online application– Applying for the loans with no guarantor from direct lenders is easier with an online loan company. They offer funds through a single online loan application. Instead of multiple page applications, it is possible to apply with just a single application following few basic steps. This saves time and funds are received in less time.
  • Immediate feedback- In case of any kind of query or doubt, the customer's query is solved immediately. Due to this, borrowers get solution to their problems. Direct lending is the main reason why these facilities are possible.
  • Easier loan modification- If the borrower faces any problem in repayments during the loan tenure, loan modification is possible. For this, the rate of interest or repayment schedule can be worked out in a short time through a simple online procedure.

Conclusion

All the features mentioned above are important to get better deals on debt consolidation loans. In direct lending, all these features are easily available to the borrower. Due to this, the borrowers get mental peace and financial confidence increases manifold.

If you too are searching for a better loan deal on debt consolidation, apply now to an online loan company. By consolidating your multiple debts through easy terms and conditions, manage your finances better.