Direct lender or connector for debt consolidation loan?

Debt consolidation is one of the main reasons people take out a personal loan. If you are interested in taking out such a loan, you have a couple of different options. You can get a loan through a direct lender, or you can have a connector find you the perfect loan.

Do you have multiple loans or credit cards that have different interest rates? Pay them off with a personal loan and remove the stress of managing them separately. This strategy can also save you money if your loan has a lower interest rate than your current debt.

See Debt Consolidation Loans

What is a direct lender?

Direct lenders give you the loan amounts they approve you for directly. Banks, credit unions, and the government are all direct lenders. They check your credit history through the major credit bureaus to determine your creditworthiness.

The best thing about working with a direct lender is that the operation is centralized. You can apply for and get your loan through the same company. Direct lenders can be trusted with your information because they will not forward your data to any third-party companies.However, you only get one loan per application with a direct lender. To see all of your options, you may have to fill out several forms with different direct lenders. You can sometimes get application results as fast as the next business day.

What is a connector?

A connector uses their loan experience to find the right loan for you. Other names for a connector are:

  • Loan matcher
  • Loan broker
  • Loan protector
  • Loan aggregator

Using a connector to find your loan can really save you a lot of time and stress. You simply fill out one application, and they use it to get you preapproved for a loan or connect you to lending options. By getting preapproved, you can get an idea of how much you might be qualified to borrow.

Most loan connectors charge you for their services. If not, then they get compensation from the lender they match you with. Keep in mind that they may not get you the best deal, but they will get you an approved lender.

Lender or connector for debt consolidation loan

There are pros and cons to both options. For instance, the advantages of getting a connector are:

  • Having someone to guide you through the confusing loan process
  • Saving yourself time
  • Getting trusted options easily and quickly

Your final decision may also depend on your credit score. If you have bad credit, some direct lenders may be hesitant to approve you for a loan. Some lenders will offer bad credit loans but charge high interest rates.

Even with a connector, you will still have to be approved by the actual lender. If you know your approval odds, you may not need the middleman.
When you shop for a loan—regardless of method—make sure you are using a trusted source. Make sure your loan broker service is accredited. And be wary of sharing personal information online.

The same advice applies to direct lenders.

Summary

When you’re looking for a debt consolidation loan, you need to consider all of your options. With a direct lender, you know who you are dealing with. However, a loan connector may be able to find you more options if you have poor credit.

Finally, take time to understand the terms of the loan before you commit to it and be sure that you can make the monthly payments on time.

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