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A Complete Guide to Direct Lenders & Online Loans

Financial emergencies happen to everyone. Perhaps you need to cover unexpected medical bills or take a costly trip to the auto repair shop.

Unfortunately, these urgent expenses can’t always wait until you get your next paycheck or save more money. Even if you can hold out for a while, you could end up facing late fees or harassing calls from creditors about missed payments.

That’s where direct lender online loans come in. If you’re short on funds and need money now, one of these short-term loans could help tide you over until you get back on your feet. These loans are quick and easy to get, making them ideal in a pinch. Plus, many online lenders will work with you regardless of your credit score or financial situation.

What Are Direct Lender Online Loans?

A direct lender online loan is a short-term cash loan funded through direct private lenders rather than loan brokers or brick-and-mortar banks. Direct lenders like Jora have an easy online application process and can disburse funds in as little as 24 hours.

Since the process is so fast, many people use these online loans for financial emergencies. Just like with personal loans, you can use the funds for various reasons. For example, the money could pay for things like home repairs, legal fees, a family vacation, or a honeymoon.

Most online direct lenders have minimal requirements, which makes them more accessible to borrowers who can’t get approved for financing elsewhere due to poor credit or spotty credit history. Online loans may also appeal more to those who live in rural areas and don’t have other options nearby.

There are several types of online cash loans, including:

  • Title loans: Also called vehicle title loans, these use your car as collateral and have a short repayment period.
  • Payday loans: These short-term loans are small sums the borrower must repay by their next payday. Payday loans don't require collateral or a credit check, making them easy to get.
  • Installment loans: These cash loans have longer repayment terms that usually span months or years. Some have higher eligibility requirements but may come with better interest rates.
  • Lines of credit: These have a set borrowing limit, but you can use them as needed until you reach the maximum.

Borrowers usually repay these loans in monthly installments. You could also pay it off all at once, depending on how much you owe.

Keep in mind that these cash loans typically come with high interest rates. Combined with short repayment terms, these high rates can make direct lender loans more expensive than traditional options. If you find yourself regularly taking out short-term loans, it may be a sign of an underlying issue (i.e., difficulty budgeting). It could even lead to a debt trap if you’re not careful.

With that said, these loans can work well as a temporary solution when you’re in a financial pinch or need cash fast. Just make sure you have a plan and a budget to pay it back on time.

How Do Direct Lender Online Loans Work?

Taking out an online loan through a direct lender is fairly simple. Here’s how it usually works:

  1. Determine what you need and why. Some online lenders require you to indicate how much money you need and the purpose of the funds. In other cases, you might also need to specify how long you’ll need for repayment.
  2. Complete a simple online application. This step usually takes 5-10 minutes, though some direct lenders have more involved applications. You’ll need to provide some personal and financial details. This information might include your date of birth, social security number, contact info (i.e., phone number and email), mailing address, income, and employment information. You may also need to provide banking details so the lender can disburse the funds if approval.
  3. Wait for the lender to review your application. The lender will look over your application and either approve or deny it. This process can take anywhere from a few minutes to several hours. Some lenders will run a hard inquiry (credit check) that can temporarily lower your credit score by a few points.
  4. Accept the loan offer. If you’re approved, review the loan offer to make sure the terms and loan amount align with what you need. Only sign for the loan if everything looks right.
  5. Receive the funds. Once approved, the lender will usually disburse the funds through direct deposit. Some online lenders have storefront locations too, so you may be able to pick up the cash in person. Fund dispersal is often fast – sometimes within 24 hours of applying or on the next non-holiday business day. Jora, for example, offers same-day funding if you accept a loan offer by 10:30 am CT (Monday through Friday).

After the money is in your account, you can use it as intended. Just make sure you repay the loan on time to avoid any additional charges like late fees. Depending on the terms, you can either pay in a lump sum or monthly installments. Also, avoid taking out more than you need so you don't have any trouble repaying the loan.

Why Jora Credit?

We are a state-licensed, direct lender providing online loans that give you access to the funds you need.
It’s easy to apply right from your phone, laptop or tablet – anywhere, anytime. And it only takes a couple minutes.
Plus, there's no prepayment fees if you want to pay off early and save some money on interest.
Accept your loan by 10:30 am Central time (Monday - Friday excluding holidays) and you can get your funds on the same day.*

How Are Direct Lender Online Loans Different from Bank Loans?

Like bank or credit union loans, online direct lenders can approve and finance loans. However, they do stand out from traditional lenders for the following reasons:

  • More Lenient Eligibility Requirements: Direct lenders are usually more flexible with their eligibility requirements. They’ll often work with individuals with poor credit or spotty credit history, especially if they have steady, verifiable income.
  • Less Regulation: Loans obtained through a direct lender online are often less regulated than traditional banks. This could mean higher interest rates and more service fees.
  • Shorter Application Process: It usually only takes a few minutes to complete an online loan application with a direct lender. This process is much faster than with most traditional lending options.
  • Quicker Approval: Banks may take days or weeks to approve a loan application, whereas direct lenders may be able to disburse funds within 24 hours.
  • Increased Flexibility: Online loans from direct lenders are often more flexible and customizable than bank loans.
  • No Prior Financial Relationship Required: You can borrow from a direct lender even if you don’t have a prior relationship with them. Some banks and credit unions only work with people who already have a checking or savings account with their institution.
  • Increased Accessibility: Direct lenders online are more accessible to people living in rural areas and the 5.9 million Americans who are unbanked (don’t have a checking or savings account with a bank or credit union).

One potential downside is that direct lenders usually offer smaller loans than banks. However, this depends on the online lender and the individual’s credit score and income.

What our customers are saying

What Are the Benefits of Direct Lender Online Loans?

Direct lender online loans are convenient and accessible to people – regardless of their location or credit score. If you need money now and want a hassle-free way of getting the funds you need, these lenders could be the way to go.

With that in mind, here are the main benefits of getting an online loan through a direct lender.

Fully Online Application Experience

When you apply through a direct lender online, you can expect the application to be entirely online and simple. Even if you live somewhere far away from traditional lending services, you can still get funding – and quickly. All you need is access to a secure internet connection.

Direct lenders use their own cash to finance their loans. They also have unique eligibility requirements. Because of this, they can verify and approve an application and disburse funds quickly. This fast process reduces the stress of obtaining financing and can help borrowers experiencing short-term financial hardship.

More Regulated than Online Loan Service Providers

There are many ways to get funds quickly online, such as through online loan connection services or providers. These services act as the middleman between the borrower and the lender to help folks get the financing they need. The downside is that these services are not always regulated, which makes them a riskier option than direct lenders.

Direct lenders must comply with federal and state regulations, meaning they are held accountable for their operations and have limitations on what they can legally do. Keep in mind that lending regulations vary by state, so the rates and terms you receive may differ based on where you live.

More Accessible to Borrowers

Direct lenders are usually more accessible to people who need a cash loan fast. These lenders are especially beneficial to those who live in rural areas or don’t have the time to wait for more traditional forms of financing. Plus, many direct lenders are willing to work with people who were denied other forms of financing due to poor credit or other reasons.

May Have Prequalification

Some direct lenders offer pre-qualification with the initial application, which lets you check your potential rates and eligibility without committing to a loan.

Prequalification is particularly helpful for people with poor credit. It can help them find the financing they need without causing further damage to their score. The actual loan application may require a hard inquiry, which can affect your credit score, though.

Bridge Temporary Financial Gaps

While these loans should never be a long-term solution, they can help if you’re short on cash. Say, for example, you lose your job and need to make ends meet this month. A cash loan could help bridge the gap and prevent late fees or damage to your credit score.

Fewer Fees Than Indirect Lenders

Many direct lenders clearly list “no fees” on their website - typically on the main page. They’re also upfront about which fees they do charge – like interest rates, prepayment penalties, service charges, and origination fees. Indirect lenders, meanwhile, may have hidden fees that you only find out about late into the application.

Although direct loans may be more affordable than other options, that doesn’t mean you should rely on them. Some short-term loans have high fees – such as payday loans, which have an average APR (Annual Percentage Rate) of nearly 400%. Some of these loans have an APR of over 700%.

If you can't repay what you owe, you could end up in a cycle of debt that lasts for months or years. So, make sure you're prepared for the overall cost: the principal balance plus any fees.

Flexible Repayment Terms

Online direct lenders sometimes offer flexible repayment terms, especially compared to what you’d get with a traditional lender. The terms can range from a few weeks to several months or beyond.

Online Financial Resources

Many direct lenders offering personal loans have free online resources that help you learn about personal finance. These include things like informative videos and articles about loans and how they work.

Online lenders also often have free calculators that break down a potential loan and show you what it will truly cost. You can use this information to explore how the loan fits into your budget.

Customer Support

Although online direct lenders don’t always have storefront locations, they still offer customer support via phone, email, online contact form, or live chat. This makes it easy to contact them if you have any questions or concerns. Depending on the lender, they may also have extended business hours or be available on weekends.

If you need to contact Jora with any query or concern, you can do so Monday through Saturday via phone. Or you can fill out an online form.

What to Look for When Choosing a Direct Lender Online

Not all direct lenders are created equal. Some offer loans in higher amounts or have stricter eligibility requirements. Things like online reputation and customer support vary, too. With that in mind, here are the main things to keep an eye out for when choosing a lender.

Financing Options

There are different types of online cash loans, including payday and title loans. Although you can use all of these to pay for something unexpected or small, some direct lenders only offer certain types of financing. Check what the lender offers and make sure it works with your situation.

Eligibility Requirements

Although direct lenders often have lower eligibility requirements, your options may still be limited based on certain factors, such as:

  • Credit score and credit history
  • Income
  • Debt-to-income ratio (how much of your monthly income goes toward your debts)

Your credit score depends on several factors, including payment history, credit utilization, and credit mix. The better your credit score, the higher your borrowing power and the better your terms. Here are the ranges for FICO:

  • Poor: 300-579
  • Fair: 580-669
  • Good: 670-739
  • Very good: 740-799
  • Excellent: 800-850

Many direct lenders will consider your complete credit and financial profile when making a lending decision. However, some don’t check your credit at all.

Even if the lender doesn’t require a credit check, you should still keep track of your score. After all, you never know when you might need to apply for another form of financing, such as a mortgage or line of credit. If possible, get a copy of your credit report and review your score before applying for a loan.

Co-signer Option

Most small online loans – including payday and title loans – don’t allow for a co-signer. However, if you’re applying for a larger loan and don’t qualify on your own, check if the lender accepts co-signers. If they do, this could improve your chances of getting the loan you need.

Loan Terms and Rates

Online loans from direct lenders are often flexible to help borrowers who need money now. Many also have customized terms and amounts based on the individual’s situation.

Interest rates can also vary widely. For example, a personal installment loan from SoFi has a fixed APR of about 15.71% with good credit and a 60-month term. A title loan, meanwhile, has an average APR of 300%.

Check what the lender offers and see if it fits your needs. If it’s not an emergency, shop around until you find the best option for you. In the case of an emergency, choose a reliable lender that is transparent about its rates and terms.

Application and Funding Processing Times

One of the main reasons why people go through direct lenders for quick loans is because they have convenient applications and fast funding. Check the lender’s homepage or FAQ page to discover how long it typically takes to receive cash.

Some direct lenders take longer to approve applications, especially if they need more information or if they have to verify something. If you need money immediately, go with a lender that can approve and disburse funds within 24 hours. Lenders typically outline the application process and any timelines. For example, Jora asks that you submit a simple online application and choose how much you need. Depending on what time you apply, you could receive funds the same day.

Other Fees

Some direct lenders charge additional fees, such as:

  • Interest
  • Origination fees
  • Prepayment penalties (charged when you pay off a loan before the due date)
  • Late fees
  • Other service fees

See if the lender has any of these and calculate them into your budget before taking out a loan.

Online Reputation

It’s always wise to check the lender’s online reputation before sharing any information or applying. Check what people say about them on websites like the Better Business Bureau (BBB) and Trustpilot. Look out for reviews that mention:

  • Unsecured website or application
  • Spam emails or calls after sharing information
  • Unresponsive customer service
  • Fraudulent or inaccurate information on the customer’s account
  • Repeat debit card or bank charges

If you can’t find the reputation of the lender you want to work with, or if they don’t seem to have any testimonials, it could be a red flag.

Customer Service Team

Even though they’re online, direct lenders should have a customer support team available to help you throughout the loan process. Find out where, when, and how to contact the lender before doing business with them.

Frequently asked questions

We bring honesty and transparency to financial services technology

Jora Credit is the Lender. Jora Credit operates under state specific companies, licenses, and rules for the states that it services. Jora Credit does not lend or arrange loans or lines of credit in all states. Please see What it Costs for the serviced states and applicable terms.

Things to Avoid When Choosing an Online Direct Lender

Scams are, unfortunately, all too common in the online lending industry. Here are some of the main signs that the company you’re considering is a scam:

  • The lender doesn’t have a clear privacy and security policy, or they share your personal and financial data with third parties.
  • They’re not licensed or registered in your state – or at all. If state-registered lenders should have the license information readily available online.
  • You receive unsolicited loan offers – via email, phone, or mail – after applying.
  • The website isn’t secured with basic encryption technology (i.e., “HTTPS” or “HTTP”).
  • The lender refuses to provide details about the loan, such as its interest rates, terms, or other fees.
  • A lender offers guaranteed approval before you apply.
  • The website doesn’t look professional.
  • When you try to apply for a loan, you end up getting redirected to an unrecognizable or unsecured website. This could signal a scam, but it could also mean you're dealing with an indirect lender.

If you think a direct lender is a scammer or want to submit a complaint, you can do so with the Consumer Financial Protection Bureau. You can also contact your state’s Attorney General's office.

Get an Online Loan Through Jora

Direct lenders are often willing to work with people with bad credit or who don’t qualify for traditional financing. The best ones typically have very few or transparent fees and offer reliable funds when you need them. Plus, they can make decisions quickly since they control the lending and funding process.

If you’re looking for a hassle-free experience and quick funding, consider applying for an online loan through Jora Credit. Jora’s online application process is simple and only takes a few minutes to complete. It’s also streamlined to be as easy as possible so eligible applicants who need cash fast can get it.

Loans range from $500 to $4,000 and may be available the same day you apply (if you approved and accepted your loan before 10:30 am CT on a business day).

If you have any questions about the process, feel free to reach out. A customer support team member will be happy to review the process with you and answer any questions. Otherwise, apply now!

More Direct Lender Online Loans Resources