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Credit Broker vs Direct Lender: What’s the Difference?

When you're looking for a loan, you can use a credit broker, who could connect you with multiple lenders, or you can borrow directly from a loan provider.
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With so many loans to choose from, finding what’s best for you isn’t always easy. If you need a steer, a credit broker  may offer you a choice of loan providers according to your circumstances, while you can apply for a loan from a direct lender if you know what you want, you’re after a simple application process and you need an answer quickly. 

What is a credit broker?

A credit broker acts as a go-between or middleman, pairing you (the borrower) with suitable lenders. They do this based on the information you supply when you apply for a loan, which can save you time when you’re looking for credit options that fit your needs and affordability. When you’re looking for home, travel or car insurance, for example, you may use a broker in the form of a comparison site like confused.com. Credit brokers don’t usually charge you (the customer) any fees, but instead make their money by earning commission from the lenders they introduce you to. This tends to happen if you successfully take out a loan with them. Credit brokers are regulated by the Financial Conduct Authority (FCA), so make sure you only ever use companies with this stamp of approval. 

What is a direct lender?

A direct lender removes the need for an intermediary, so you directly deal with them when you take out a loan. When you use a direct lender, they'll tell you if your application is approved (or rejected!) and will transfer the funds into your bank account. All communication is between you, the customer, and them, the lender. Got a less than perfect credit rating? A direct lender providing bad credit loans may be able to help. Like trusted brokers, be sure to only ever borrow from lenders that are regulated by the FCA. 

What are the key differences between the two?


When it comes to understanding the difference between a credit broker and a direct lender, there are a few important things to consider.

A credit broker: 

  • Finds loans for you based on the information you provide about yourself to suit your needs and affordability 

  • Usually only carries out a soft credit check when you apply – a hard check is run by the lender when they process your application  

  • Typically won’t charge you any fees for their credit broker loans – they instead make their money from commission paid to them by the lenders they introduce you to 

A direct lender: 

  • Approves your application (or rejects it) and informs you directly 

  • Will deposit your loan straight into your bank account 

  • Will communicate with you directly without the need for intermediaries  

Remember, loans you get through different credit brokers and direct lenders have varying terms, so it's important to understand the conditions of any type of borrowing. Furthermore, make sure you can afford the repayments before making any kind of financial commitment. It's also worth bearing in mind that the more credit you apply for during a short period of time, the riskier and more desperate for money you’ll appear to lenders – and you could end up damaging your credit score, too. 

Is Creditspring a direct lender or a credit broker?

Creditspring is a direct lender. We provide small personal loans, from £400 (split into two £200 instalments) up to £2,400 (split into two £1,200 instalments), for thousands of UK residents. Even if you have bad credit, you could still be eligible, because we look beyond a poor credit score. We’ll consider your financial situation and your ability to repay the loan, too.

What are the most popular credit brokers in the UK?

It’s important to do your research carefully and thoroughly as there are many credit brokers in the UK to choose from, online or face to face. Sites like comparethemarket.com and aro.co.uk are well known and reputable in the industry, so could be a good start. To check if a credit broker is authorised by the FCA, you can search the FCA’s Financial Services Register


How can I get a loan through a direct lender? 

Every lender has its own application process. Once you’ve done your research and have settled on a loan provider you’d like to borrow from, you can usually apply online directly via the lender. You’ll likely be asked for your personal details, income and other relevant information to check your eligibility in the first instance.  

If you’re considering a Creditspring loan, you can check your eligibility right now and find out if you qualify.  

How can I get a loan through a credit broker? 

As each credit broker’s search process can differ, you may notice slight variations with their requirements. However, expect the usual request for your personal information, like your name, date of birth, home address, income and other details, and make sure the information you give is accurate to get the best lender options to suit your needs and affordability. 

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