If you’re thinking about getting a title loan, you may be wondering if there is a difference between going through a broker or a direct lender. Both brokers and direct lenders may be able to help you get a car title loan. However, their processes are a bit different. Brokers help you by reaching out to a number of other lenders to solicit loan offers for the borrower. In contrast, direct lenders offer only their own loan products. However, they may be able to do things like work with borrowers to craft a loan agreement that more-closely fits their unique financial circumstances.
How do I get a title loan through a broker?
When a borrower approaches a broker about a title loan, the broker will take the borrower’s information and reach out a network of lenders. Generally, these lenders have a variety of specialties. For example, some may specialize in lending on older cars, or high-value loans, or even motorcycles. Lenders that are interested will send the broker a loan offer. These will be presented to the borrower, who can select whichever loan they prefer, or walk away. Assuming the borrower elects to sign a loan agreement with one of the lenders, the broker steps out of the picture. From that point forward, the borrower will interact with the lender, just like a regular title loan.
On the surface, this may seem like a better idea than using a direct lender. After all, with one application, you can get loan offers from a variety of different lenders. This can save you the trouble of contacting multiple lenders for loan quotes. Also, the broker will know which lenders will be most interested in giving you a loan, as well as which lender is most likely to give you the best deal on your loan. Despite having a number of different lenders competing for your business, this may not give you the best deal on your title loan when compared to what you could get from a direct lender.
What are the benefits of getting a title loan with a direct lender?
There are a number of benefits to getting a title loan from a direct lender such as LoanMart instead of a broker:
- Flexibility – While a broker may contact a number of different lenders, they are doing so based on guidelines provided by the lenders. As such, they may be less-able to make exceptions for borrowers with extraordinary circumstances. In contrast, the person you speak with when you approach a direct lender will likely have some say in whether or not your loan application is accepted. As a consequence, they may be able to work with you to give you a title loan better-tailored to your circumstances
- Lower Fees – All title loans come with fees. The more people that are involved in the title loan process, the more fees there will be. This is because each person involved needs to make money. As such, the broker’s fee may be passed on to the borrower. So working with a direct lender can lower the overall cost of a loan.
- Usually not paid on commission – Direct lenders handle the loan from start to finish. As such, they typically aren’t paid on commission; they make money directly from giving you the loan. Brokers usually are paid on commission. Some loans may give brokers a better commission. Because of this, they may be inclined to steer borrowers towards products that offer a bigger payout, even if it isn’t the best product for that particular borrower.
- Borrower personal information is less exposed – Brokers find borrowers a better deal by contacting as many different lenders as possible. As such, it behooves them to spread your contact information around. Some brokers only work with lenders who protect borrower information, but others do not. These lenders may do things like sell borrower information to advertisers, or even contact them directly regarding title loans in the future. In contrast, direct lenders may not want other companies competing with them for the borrower’s business. As such, they are incentivized to protect borrower information fiercely.
- Loan processing time may be reduced – Brokers need to send your information to different lenders and wait for a response. In contrast, the representative of a direct lender will have at least some influence on your approval. Additionally, they can contact decision-makers directly, also potentially reducing wait times. There is no need to wait for information to be moved between companies and verified.
- The same company takes the borrower through the entire loan process – Brokers eventually hand off a borrower to a lender. This may mean they are less-familiar with the particulars of each lenders’ loan process and/or product and cannot accurately answer a borrower’s questions. If it turns out that the broker was mistaken about a loan detail, the borrower may need to begin their search for a lender all over again. In contrast, a direct lender’s agent will intimately familiar with their loan products. They will be able to answer any questions the borrower has, not only at the onset of the application process, but during the whole loan cycle.
Taking out a title loan can be a big decision. Once you’re sure that you want a title loan, you still need to decide where to get your title loan from. Deciding between a broker and a direct lender can have a major impact on the terms of the loan, and the total cost of your loan. It may seem like it saves you time to use a broker, but using a direct lender such as LoanMart for your title loan may allow you to get a loan that is customized to your unique financial situation.