Lenders vs Brokers

When searching for a loan, many people may wonder if it is best to apply with a direct lender or a broker. Here is some information that may help you decide.

We have all faced unexpected expenses at inconvenient times. It can be a household emergency, such as a boiler breaking down, or an important car repair you can’t afford to postpone. Often, when something arises, we haven’t budgeted for it can leave us short of money. Some of us will turn to friends or family, but they aren’t always able to help, even if they’d like to.

When people find themselves in this situation, they’ll often turn to Google and search for things like short-term loans, emergency money, payday loans etc.

Depending on the exact search term you use, you are likely to be shown Lending Stream, Sunny, Satsuma, Uncle Buck and Peachy amongst the results. These are all known as direct lenders, as they borrow the money to you directly.

Other companies you may come across, are brokers of payday and short-term loans. A broker’s website may look identical to a direct lender, providing lots of useful information and allowing you to apply for a loan and receive an instant decision.

More questions? We've got you covered

What's the difference between brokers and lenders?

A broker acts as a middleman and directs you towards a direct lender that can help you with the short-term loan you’re looking for. All brokers must state on their website that they are a broker. Some brokers may charge a fee for finding a suitable lender.

A lender will lend you the money directly, presuming you’re eligible. It’s crucial that if you use a direct lender, you understand their terms and conditions attached to the loan.

What are the pros and cons?

A broker will usually have access to several different direct lenders. When you apply using a broker, you are compared to the criteria for all their lenders, and a good broker will then show you the best result available for your circumstances.

A direct lender only has their products to offer, so while you can still apply, they won’t compare different lenders to ensure you get the best rate. Instead, if eligible, you’ll be offered a loan at their current rate, regardless of how competitive this rate is.

Can there be a big difference between APR rates?

Yes. Over the last couple of decades, short-term and payday loans have grown massively in popularity. More people than ever are choosing a short-term loan to help them out of a sticky situation. This has made the market far more competitive, with lenders all vying for your business. Even lenders that specialise in loans for people with poor credit compete with other lenders.

All this competition is good news for consumers, as it means more lenders are offering better rates and special offers to win the consumers custom. However, the payday loan market is very fluid, and what might be the best solution for you might not be right for someone else. The best deal one week might not be the same the following week. This flexibility passes the advantage to brokers, who’ll compare dozens of companies to ensure you’re getting the best current deal available for you.

Is a payday loan right for you?

Many people use payday loans to successfully keep their heads above water at various times throughout the year. However, a short-term loan is not a long-term financial solution. You must be sure you can afford the repayments and stick to the terms of the agreement before accepting a loan offer.

Who is Lending Stream?

About
Lending Stream has been providing loans since 2008, making one of the most established lenders in the short-term loans market. They are part of Gain Credit LLC, which is a subsidiary company of Gain Credit Inc.

Loans
As a first-time customer, you can apply for a loan of up to £800. Returning customers can apply for up to £1,500.

Repayment options
Lending Stream allows customers to repay their loan over 6 months. They offer 2 repayment options; they can collect the money on a specified date automatically or you can make payments via their website or over the phone.

Speed of payout
Lending Stream says that as soon as they have finalised your loan, they can send the money to your bank account within 90 seconds. Lending Stream loans are paid out 24 hours a day, 7 days a week.

Criteria
You must be a UK resident aged over 18 years, be in regular employment (no self-employed applicants) with an income of at least £400. Also, you must have a valid debit card with a UK bank account. You also need to pass their credit and affordability checks.

Additional information
There are no application fees to apply to Lending Stream. The only fee they charge is a late fee of £15 for late or missed repayments.

Who is Satsuma Loans?

About
Satsuma Loans is a trading style of Provident Personal Credit. Satsuma is a relatively new brand; however, they are part of a company that has been lending to UK customers for over 135 years, making them one of the most well know and reputable brand names in the UK.

Loans
Satsuma offer loans ranging from £100 up to £1000.

Repayment options
You can repay your Satsuma Loan over a period of 3 to 12 months, giving you a good level of flexibility. You can choose to repay your loan early by contacting Satsuma and requesting a settlement figure.

Speed of payout
Satsuma payout loans on an hourly basis between 6 am and 11 pm. So, if your application is approved, the loan can be paid out during those hours.

Criteria
To be eligible to apply for a loan with Satsuma, you will need to be between 18 and 74 years old, be a UK resident and not be bankrupt.

Additional Info
Satsuma offers a SmartCheck service which enables customers to check their eligibility for a loan without affecting your credit score. There are no fees with Satsuma Loans. This includes late or default fees.

Who is Peachy Loans?

About
Peachy is a short-term loan lender that was established in 2010, making them one of the longest-serving lenders in the short-term loan industry. Peachy is a trading style of Cash on the Go Limited.

Loans
Peach offer loans from £100 to £1000.

Repayment options
Peachy has a very flexible range of repayment options all the way up to 12 months. Payments are taken by debit card or bank transfer, however, there is the option of making payments earlier than the specified date.

Speed of payout
Peachy says they can pay out some loans in 15 minutes, depending on banks processing times, the maximum wait should be 2 hours.

Criteria
To be eligible for a loan with Peachy, you must earn a minimum of £1000 per month, be over 18, a UK resident with a mobile phone and email address. You must have a valid bank account and debit card and not have any CCJ’s in the last 6 years.

Additional Info
At Peachy you can apply for a loan online 24 hours a day 7 days a week. There are no charges to apply and you can repay your loan early without penalty.

Who is Uncle Buck Loans?

About
Uncle Buck is the longest-serving short-term loan lender currently trading in the UK. They started lending to customers in 2004.

Loans
Uncle Buck offer loans from £100 to £1000. However, first-time customers can apply to borrow a maximum of £500, with the higher amount available for returning customers to apply for.

Repayment options
You can choose to repay your Uncle Buck loan over a 4-month or 6-month period. Repayments are taken from your registered debit card.

Speed of payout
Uncle Buck says they can pay out loans in 15 minutes, between 6 am and 11 pm. Loans accepted after 11 pm would be paid out on the next day.

Criteria
To be eligible for a loan with Uncle Buck, you must be over 18, a UK resident who is employed, with a mobile phone and email address. You must have a valid bank account and a debit card. Must not be in or about to enter into a debt management plan, IVA or be made bankrupt.

Additional Info
You can apply for an Uncle Buck loan 24 hours a day 7 days a week. There are no applications fees. If you make a late payment, they may charge a late fee of £15.

Who is Wonga?

Wonga.com was founded in 2006 and quickly became the largest payday loan provider in the UK. They provided themselves on putting technology at the forefront of their processes and many lenders followed suit. The ability to allow for small amounts of money very quickly made Wonga the poster child of the payday loan industry.

Following a turbulent few years, following the introduction on the Financial Conduct Authority as the industry regulator, Wonga went into administration as a result of a high number of customer complaints and redress claims in August 2018.

Who are Quick Quid, Pounds to Pocket and OnStride?

Following the challenges that were facing Wonga, Quick Quid became the UK’s biggest payday loans lender. As part on the US company Enova, EuroCashNet UK grew Quick Quid and their other brands, Pounds to Pocket and OnStride to be household names in the UK due to a large TV advertising presence.

As with Wonga, they faced challenges due to increased oversite from the Industry regulator, the Financial Conduct Authority, and they went into administration in October 2019, closing all 3 brands.