Direct Lender Loans

Cara Bradley

Written by

Cara Bradley

5 min read

Updated: 22/02/2024

Direct lender loans are loans that are applied for directly with a credit provider. This is a different process to using a credit broker to search for a loan. In this article, we explain the differences between the two so you can understand which process is the right one for you.

Credit lenders and credit brokers

Viva Money is a credit broker, not a lender. We work with a panel of lenders who are all authorised and regulated by the Financial Conduct Authority (FCA).
Viva Money can help you search for a loan from £100 up to £10,000, with repayment terms between 3 and 60 months.

Applying for a loan directly with a lender Searching for a loan with a credit broker, such as Viva Money
Direct lenders can only check whether their own product(s) is suitable for you. We will scan our large panel of trusted lenders to try and match you with a suitable loan. This could save you time and could also protect your credit score from multiple hard searches.
A direct lender will conduct a hard search as part of a full application, which can remain on your credit file for up to 12 months, and is visible to other potential lenders. Too many hard credit searches in a short space of time can have a negative impact on your credit score. Viva Money use soft search technology to take an overview of your financial history, without leaving a footprint on your credit file or affecting your credit score. If you are matched with a loan and go on to complete a full application with a lender, you will then undergo a hard credit check.

Whether you apply for a loan using a lender or a credit broker, make sure that the company you choose are authorised and regulated by the Financial Conduct Authority (FCA). You can check if a company is on the FCA register here.
You should be very wary of any company offering credit who are not on the FCA register.

Can I apply for a loan directly with a lender if I have bad credit?

Some lenders could be willing to consider loan applications from those with poor credit history; however, it’s important to remember that not all will. In addition to this, you should bear in mind that if you are approved for a loan with bad credit this could be at a higher interest rate, and you might not be able to borrow as much money as you’d like to.

As we mentioned in the table above, when you apply for a loan directly with a lender they will run a hard search on your financial history. This is part of the application process and it’s something responsible lenders do. Numerous hard searches over a short period of time could harm your credit score.

Using a credit broker to search for a loan could be an alternative option if you’re looking to minimise the amount of hard searches on your credit report.

Can I apply for a loan directly with a lender if I have no credit history at all?

As is the case for those with bad credit, having no credit history at all could make borrowing more of a challenge. You may have heard this referred to as having a ‘thin’ credit file.
If you have no credit history, you probably haven’t ever paid bills or borrowed credit before. This makes it difficult for lenders to understand how you manage money. As such, they may see someone with a thin credit file as a borrowing risk.

Some of the lenders on the Viva Money panel are happy to consider applications from people with thin credit files.

How can I search for a loan with Viva Money?

We’ve broken the Viva Money process down into four straightforward steps below.

  1. Choose the loan amount and term. Never borrow more money than you need, or can afford to repay. Fill out our straightforward online form; this should take no longer than five minutes.
  2. We’ll run a soft credit search on the information you have provided and scan our panel of lenders for a match. You’ll be shown your result on your screen in around 60 seconds.
  3. If we’ve found you a loan, you’ll be redirected to the lender’s website where you can read more about the product you’ve been matched with. If you decide to go ahead and make a full application, you’ll complete some further checks, including a hard credit search.
  4. If the lender is happy with the result of their checks, you will be sent a loan agreement. Be sure to read this thoroughly before deciding whether to sign and return it.

I’ve taken out a loan that I can no longer afford to repay. What now?

You should contact your lender as soon as you can. As daunting as opening up may seem, you will not be judged for your situation. Sometimes, things change out of our control, and lenders understand this.

I’m struggling with my finances. Is there anywhere I can go to for help?

First of all, as hard as this may be, please try not to panic. Money worries can quickly consume us and it’s easy to feel like there’s no end in sight, but please remember that this isn’t the case.

If you’re looking for some advice on what to do next, you may be interested in taking the Money Health Check quiz, which we are proud to provide alongside the debt charity StepChange. The quiz can be taken online for free, and will not affect your credit score in any way. Don’t worry – the answers you provide will remain confidential.

In addition to this, you can also access free, impartial money and debt management advice on sites such as MoneyHelper, Citizens Advice, and National Debtline.