Borrow Payday Loan from Direct Lenders vs. Brokers

For most people living paycheck to paycheck, there's little money left over for unexpected or unanticipated expenses. Emergencies, holidays, special events, and unanticipated bills can easily destroy your family budget, but they don't have to! Even people who are unable to obtain loans from conventional sources can often find the way out in online payday loans.

A payday loan is a small loan, usually under $1,000. It’s made to individuals as a line of personal credit. The repayment period is usually relatively short, but interest rates and fees are often higher than a conventional bank or credit union.

Online payday loans usually carry lower rates and fees than brick-and-mortar payday loan or payday loan businesses, because the online services have lower overhead and fewer costs. Because the amounts are lower than most conventional lenders offer, online short-termloans can be a great way to avoid late fees or to cover small emergencies like medical bills or auto repairs.

Borrowing from direct lenders vs. borrowing from brokers

When getting an online payday loan, it's important to select a legitimate lender. Unfortunately, fraud is a problem in this industry, and some lenders can be a bit shady. This may inspire you to seek out a broker for your payday loan. Still, there is a number of direct lenders available.

Borrowing from brokers

It may appear attractive to borrowers to work with a broker. As a rule:

  • brokers work as a middleman with multiple online lenders;
  • they can find better rates by working with a network of lenders rather than a single lender.

Unfortunately, while they may find you better rates, any slight difference in rates diminishes when you factor in broker fees. Additionally, some brokers may be getting a commission or kickback from the lender, meaning that the broker may direct you to a lender who's not right for you but who pays a higher commission. Working with no broker is sometimes a better option.

Online payday loan from direct lenders

When you use a direct lender, you work on no broker terms. These are small loan lenders who work directly with a consumer. There are some advantages of working directly with your lender.

Advantages of online payday loan from direct lenders

  • You can determine which lender you work with, check out their reviews, and select a legitimate, reputable institution.
  • You have no broker fees to pay, saving you money.
  • You can compare prices, features, and rates among different direct lenders and obtain all the information yourself.
  • You don't have to worry about whether your best interests are met.

Disadvantages of online payday loan from direct lenders

  • You have to make all the research yourself.
  • The process becomes time-consuming and more complex.
  • You might not get the best rates and terms.
  • If you get into fraud, it’s harder to track the lender as you have little contact and no evidence from a third party.


Reputation can tell you a lot about whether it's wise to work with a lender or not. You can select your provider based on the reviews of others, reports to the Better Business Bureau, and reports to online consumer reporting agencies.

Making a smart choice

There are dozens of online payday loan direct lenders available online, and each of them has slightly different policies. Within the same lender, there may be dramatic variations in product offerings. It allows you to customize a payday loan that meets your unique and individual needs.

1. Prefer an online payday loan direct lender who offers flexible payment terms, allowing you to pay a smaller amount over a longer period of time. A broker can help you find one.

2. If you plan to repay the loan quickly, you may find that your needs are best met with more attractive interest rates or lower fees. Interest rates may be more damaging for larger amounts, whereas fixed fee schedules may be less attractive for smaller amounts.

3. Choose a direct lender that's legitimate, reputable and honest.

Online payday loan services can help you meet your financial needs, even in emergency situations, and they can be a useful part of your family's budget considerations. However, it's important to choose your lender wisely, and to understand the difference between a broker and a direct lender so that you can make a smart choice.