What is a Payday Loan Direct Lender?

Author · Modified on 15 September, 2022

A payday loan direct lender provides a consumer with a loan themselves, rather than using a third-party broker. This means that if your application is declined, the lender is unable to suggest alternative loans, as only their financial products are accessible to them.

Alternatively, you can use a platform such as Dime Alley who can connect you with various lenders, helping you find the best one for you.

Key Points:


  • A direct lender provides borrowers with loans themselves, rather than using a broker as a middleman.
  • The US is home to around 23,000 payday lenders.
  • Different lenders will offer varying terms. Lenders in states with interest caps will not be able to charge APR higher than legislation dictates. For instance, interest on loans in New Hampshire cannot exceed 36%.
  • If you can’t repay your loan, communicate that with your lender and try to negotiate a new repayment plan.
  • If you fail to repay your loan, your lender can charge further fees and could even take you to court, although this would be a last resort.


What is a No Third Party Direct Lender?


A direct lender is a lender that provides the loan directly to you, the borrower, without a third-party lending partner being used.

Direct lenders are not associated with any credit union or bank and are therefore considered independent business entities.


How Are Direct Lenders From Each Other?


Different lenders will have different terms attached to their loans. For instance, lenders will offer lower interest rates on loans, some will have different repayment periods, and some will offer larger loans than others.

They may also offer different eligibility criteria. The need for a guarantor to sign your application will be needed by some direct lenders and not by others. Additionally, some will pay more attention to your credit history in deciding whether they will loan money to you.


Will My Lender Help Me If I Can’t Repay My Loan?


Your lender wants you to be financially comfortable, but also wants to have their money back as you both agreed. Many lenders will be willing to rejig your repayment plan according to your circumstances. If you find yourself unable to repay, you should contact your lender and have an honest conversation to try and find a mutually beneficial solution.


What is a Payday Loan?


Payday loans are short-term, high-interest loans which offer a helping hand during short-term financial troubles, such as paying off medical bills or an unexpected cost. Payday loans should not be viewed as a long-term source of financial security. This is mostly because of the high interest rates that typically accompany the loans, making them unsustainable to repeatedly take out.

There are certain restrictions attached to taking out loans. Money attained through a payday loan cannot be spent on anything illegal, and you are usually not able to spend the money on gambling.


Payday loans offer a short term solution to unforeseen financial troubles.


What Happens If I Default On Repayment?


If you fail to repay your loan on time, you could be faced with various consequences. While legal action is possible, it is often not taken. Even so, you may be hit with further fees and damage to your credit score.

As your credit score is a determinant of whether you will receive future loans, this is something you should take seriously. Payday lenders are notoriously prompt in following up unpaid debt, so you should keep on top of the loans you have, and when you need to pay them off.


Can I Borrow Multiple Loans At Once?


It may be possible, yes. However, the Consumer Financial Protection Bureau are clamping down on this to prevent consumers’ debts becoming too high and therefore difficult to repay. Therefore, it may become increasingly difficult to attain more than one loan at once.

On top of this, you may wish to avoid having multiple loans at once. The onus of paying them back is very high, as interest is substantial and the consequences of not paying them back promptly are serious.

Instead, if you are in need of funds, you may want to consider creating a new budget, asking friends or family for support, or turning to a financial adviser for professional guidance.


early loan repayment
Be aware of the consequences of not repaying loans on time.


Am I Eligible For A Payday Loan?


Direct lenders will have varying eligibility requirements. If you are seeking a loan and you meet our eligibility criteria, you are able to apply for a loan through Dime Alley. We work with different lenders and find the best loan for you.

To apply through us, you simply need to meet these requirements:

  • Be at least 18 years of age
  • Be an American citizen
  • Have a minimum monthly income of $800
  • Have a current account for us to deposit your loan into

Given that we work with various lenders, if your application is rejected by an individual lender, you have many other options. This is a feature that is not offered by direct lenders.

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