Direct Lending vs. Indirect Lending
As you may be discovering in the vast world of finance, there are several ways to apply online for loans for whatever you want to purchase, apply online for credit cards, or for other types of financing. One very viable option is through direct lending vs. traditional brick-and-mortar financial institutions.
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Below is a list of Frequently Asked Questions — and our Frequently Provided Answers about direct lending, applying online for loans and applying online for credit cards.
Q. What is direct lending?
A. Direct lending is an alternative financial resource that many people just like you are discovering through the Internet, through advertisements on TV, radio and print media, through friends and through family members.
Direct lending can be used to finance just about anything you may want to buy, from a boat to a car, from your primary home to a vacation home, and for much more. In fact, many colleges are now using direct lending, enabling students to bypass traditional banks and student loan guarantee agencies that charge much higher fees for similar types of loans.
Q. How does direct lending differ from indirect lending?
A. With direct lending institutions, you—re able to work directly with companies like Capital One or eLoan that offer you a broad range of mortgages. You simple apply online for loans specifically tailored to your needs, gain approval, secure it, and get billed directly. If you—re buying a car, boat or motorcycle, you then usually receive a check for the amount of the purchase.
In most cases, you—ll save money with direct lending because these lenders have far less overhead than if you were paying a large traditional bank or savings and loan with hundreds of offices and thousands of employees.
You can save time, too. After all, consider that with many direct lending companies, you can go through the process to apply online for loans entirely through the Internet — any time of day or night — and usually get a pre-approval or approval the same day electronically. The lender may also call you to tell you that your application has been approved and to tell you the next steps to follow. So you won—t have to leave your house and go somewhere to wait for loan approval.
Q. What are the benefits for consumers of direct lending?
A. When you apply online for loans or apply online for credit cards with direct lending, you—re really streamlining the process of securing your finances in the most time and cost-efficient way available in today—s fast-moving financial marketplace.
Some benefits include:
- Avoiding negotiations with auto or home finance and insurance people.
- Being able to shop multiple brands and dealers — for autos, boats, motorcycles, and more.
- Letting you negotiate more confidently as a so-called cash buyer.
- Enabling you to delete the middleman in a price negotiation.
- Getting the best deal available at the lowest-priced loan.