Benefits of going direct
Going direct means that you get a single decision.
These days finding a direct lender who is willing to lend to those with bad credit is becoming more difficult. Direct Lenders often try to focus on more prime customers, the ones who could pass a credit check.
In the UK, there are now less than about 20 direct lenders in the subprime sector, who are willing to lend to those with past problems.
That is not the case on this site, we can provide you with a list of Direct Lenders if you like.
History of being Direct Lenders
No Credit Check first became a direct lender in 2012. Back then, we provided loans to many who were continually being ignored by traditional lenders. They would tell us that nobody else would give them a chance; loans were difficult to come by.
Then came the Financial Conduct Authority and declared that lenders had to perform affordability checks on applicants. We knew things would be getting more complicated from there. We feared that the FCA was acting on behalf of the big banks. The big banks made the most money when customers were wandering into unauthorised overdrafts. The FCA had to get rid of lenders in the market that were stopping that - that would be lenders like us.
The FCA made it impossible for sites like ours to operate directly. Our only optio0n would be to escape to Europe and lend from there. Unfortunately, we couldn't follow through on this because of the Brexit vote meant that it wouldn't be worth it to start lending from there. After all, we should have left the EU many years ago. Therefore we decided to stop lending directly.
Well, it meant that we could no longer offer any loans directly like we previously had done. We would have to outsource the lending to other lenders. But there were three significant side effects that we didn't foresee.
The first (is a negative) was that loans would get a little bit more expensive for our customers. We found that on average, a £500 loan would cost around £750 over 2 months. Back in 2013, We used to charge around £700 in total for the same loan.
The second (a positive) was that customers would be approved to borrow more money. Other lenders seemed to have more appetite for risk than we did. The maximum we used to lend was £1000 that shot up to £3000 when we brought in others.
The third is that more people were being accepted. Because the number of decision-makers was increased from 1 to about 30, applicants were being approved in higher numbers than before.
It wasn't a positive change for us, but for customers, they benefitted more than they lost.
The way it works now is that we have a panel of lenders who will perform affordability checks. If you have enough left each month to make the loan repayments, then you should be approved.