Does a direct lender loan differ from a personal loan?
There isn't a specific financial product referred to as a direct lender loan, it's more of a reference to the difference between a direct lender and a broker. One is a lender who you deal with directly, the other is a broker where you aren’t necessarily in direct communication with a lender. Both are regulated by the FCA, however.
So, you could apply for a personal loan from a company which also happens to be a direct lender, just as some payday lenders or short term loan lenders can be direct lenders too.
Am I more likely to be approved for a loan than a credit card?
No is the short answer, approval for one over the other is not more likely, there are many other factors to consider.
Although eligibility criteria can vary from lender to lender, your own credit score is one of the key factors which can determine eligibility. Therefore, if you have bad credit, it doesn’t necessarily mean you’re likely to be approved for a loan rather than a credit card, or the other way round.
When a lender assesses your eligibility, they take your credit score into consideration. Using the data held at credit reference agencies such as Experian, Equifax, or TransUnion, they can understand what your credit history looks like. So, if you’ve made numerous applications over a short period of time or possibly missed payments in the past, your credit report will indicate all this. And Lenders will use this information as part of their criteria.
If you have bad credit however, this doesn’t necessarily mean payday loans, short term loans or bad credit loans are the only options. You may be eligible for the 118 118 Money Credit Card. If you think a credit card can cater for your needs, then remember, we do consider applications from those with bad credit. Use our eligibility checker to see if you’re eligible, this doesn’t impact your credit score.
Credit cards as an alternative to direct lender loans
Some credit cards do come with a lower interest rate than direct lender loans. The representative APR on the 118 118 Money Credit Card is lower than on our personal loans. Although, as with any type of credit, your credit rating will be a factor in what of loan or credit card you’re eligible for and whether your application is approved. Our credit card eligibility checker will give you an indication if you’re likely to be accepted, without impacting your credit score.
If you are searching for a direct lender but feel the features of a credit card may be a more suitable option, a credit card from 118 118 Money could be an option for you. It will be interest-free if you repay your balance within 51 days on purchases, if you don’t make the full balance payment there will be interest to pay. It’s important to remember that if you hold a balance, there will always be a minimum monthly repayment for you to make
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Credit Cards
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Direct Lender Loans
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Representative APR
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Can be lower than direct lender loans
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Generally higher than credit cards
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Repayments
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Repay in full, make a minimum monthly repayment or anything in between
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A fixed monthly instalment to make, although it may be possible to repay early if you can afford to
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Credit Limit/Amount
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Can be used as a continuous line of credit, within the agreed limit
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The arrangement stops once you have repaid the loan amount plus interest in full
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Why use a 118 118 credit card as an alternative?
If you’re looking for an alternative to a direct lender loan, our credit card could be just what you need. Here’s why:
- A credit limit of up to £1,200.
- Repay in full or in instalments, as long as you make your minimum repayments. It’s recommended you always pay off more than the minimum if you can.
- Up to 51 days’ interest-free on purchases if you repay your balance in full each month.
- Check your eligibility with no impact on your credit rating.
Will 118 118 Money do a credit check on me?
We are regulated by the Financial Conduct Authority (FCA), so whether you apply for a direct lender loan or a credit card with 118 118 Money, we do complete a full credit check. This allows us to look at your borrowing history and helps us decide on whether you meet our eligibility criteria or not. We also believe in responsible lending and don’t want to get you into money problems; therefore, we want to make sure any credit you have with us is also affordable for you too.
You can always check your credit report before you apply for direct lender loans, cards or any other type of credit. And don’t forget you can use our tool to check your eligibility before you apply – without impacting your credit score.
How do I know if I’m eligible?
Think our credit card could be an alternative to a direct lender loan for you? Before you apply, use our eligibility checker. It will tell you how likely you are to be approved and the credit limit we can offer. Plus, it won’t affect your credit score.
To be considered for the 118 118 Money Credit Card, you’ll need to:
- Be a UK resident aged between 18 and 70 years old
- Earn at least £8,400 a year
- Not currently be in arrears with another lender
- Have had no default payments in the last six months
To use the eligibility checker, we will require the following:
- Name
- Email address
- Date of birth
- Current employment and residential status
- Home address
- Net monthly income
- Outgoings
Apply for a credit card with 118 118 Money
Want to apply for a credit card as an alternative to a direct loan? Try our eligibility checker to see if you could be accepted for a 118 118 Money Credit Card – and it won’t affect your credit score.
