The Lowdown on the Differences Between a Direct Lender and an Indirect Lender

"Should you borrow from a Direct Lender or Indirect Lender" confused woman in yellow shirt and pink background

Should you pick an online payday loan direct lender? 

When looking for online payday loans, you have probably seen the terms “direct lender” and “indirect lender”.  It can be confusing, and you might not be familiar with what those terms mean. You might be wondering what online payday loan direct lenders are, and how they differ from other payday lenders. This article will discuss the difference between direct and indirect lenders. It will also compare the pros and cons of each. 

There are so many lenders out there, and they all have different rates and terms. Is this loan company legitimate? How do I find safe loan providers? How do I find the best loan rate? There can be so many questions when looking for a lender. If you are looking for a lender, it is because you need money. You should not have to worry about your security too! At Net Pay Advance, we try to help our customers. That is why today we are looking at the difference between direct lenders and indirect lenders. Both lenders have positives and negatives. Today we will compare direct lenders and indirect lenders. 

Direct lenders  

With direct lending, you work directly with the lender. There is not a third party involved in the lending process. The application, loan, and repayment are all done with the same company. You apply with that company; if approved, they send you the funds; and then you eventually repay the company. The whole loan process is with the same company.

It is only one lender looking at your application and determining if you are approved or not. You only have to submit one application, but that means that you only get one offer if approved. You could shop rates online on your own time. Unfortunately, that means applying to several different companies, which can take time. 

The good news though is that when you do find a direct lender to loan with, it helps keep the process simple. Since you work with the same company from start to finish, it means that they are available to help. There is no confusion on which company you are working with at any time. You know which company to call when you have questions. The person that answers likely knows the process and can fix the issue during the call. In this sense, working with a direct lender can be quite convenient! 

When you work with a direct lender, your personal information stays with that company. They do not send out your information to a bunch of other companies. That means you will not be overwhelmed with junk mail. That also helps keep your personal information safe from prying eyes.


  • Only have to fill out one application
  • Simplifies the lending process when you work with one company
  • Much less marketing emails/mail
  • Keeps your information more secure


  • Working with only one company
  • Only one offer at a time
  • Can be a slower process

Indirect lenders  

Indirect lenders usually involve a third party. It is no longer the borrower and lender. It adds a middleman to the loan process. Traditionally with indirect lenders, you submit your information to one company, and they send it out to more. Instead of working directly with the lender, you are sending out your personal information to several lenders at once. Along with that, the entire process may be confusing. The company you apply with might not be the same company that lends you money. You may borrow from one company and pay back a different company. It can cause confusion if you have questions during the process. These companies might not be aware of each other’s processes, which can add another layer to the confusion. In addition, it does not leave accountability. If you have an issue, there is always a chance that both companies could blame the other one. 

When you work with an indirect lender, your personal information does not stay in one place. Instead, it is sent out to so many other companies and people. Each time a new person sees your personal information, it is a risk. Each new person increases your chance of experiencing fraud or even identity theft. Once you send an application to an indirect lender, you have no way of knowing who sees it.  

An indirect lender means that you will receive several loan offers around the same time. The bad news is that you may get several emails, mailers, and robot calls with offers. The good news is that they will likely have competing prices. However, those low fees may be attached to loans that require a credit check. A company might hook you with a good rate that you do not qualify for after a credit check. Not only is that disappointing, that credit check could also hurt your credit. 


  • Working with more companies
  • Can see multiple options at once
  • Multiple offers with different rates and terms


  • You may not qualify for every offer, which could hurt your credit score
  • Tons of junk mail, spam email, and robot callers
  • Higher risk of scam and identity theft
  • Confusing to work with several different companies

In conclusion, indirect lenders are great for getting a lot, and we mean a lot, of offers at the same time. It makes the process of finding a lender easier. Direct lenders may only have one or two types of loans. However, you will work with the same company and the same people throughout the entire process. It makes the process safer and convenient. 

There are several ways to find out if a lender is direct or indirect. Most lenders will mention it on their page. One of the first lines on our home page mentions that we are a state-licensed direct lender. They may not say it in exact terms, but there is common terminology. If they say they “will shop around” for the best rates, or something similar, they are likely indirect. If the site does not mention it, you can always call the company. Ask the company about their licenses and if they are a direct lender. Since there are pros and cons on both sides, most companies are upfront about it.  

Are you ready to receive funds through a direct lender? Are you tired of looking for a safe and secure lender? You can apply now with Net Pay Advance for fast cash. We keep the process simple, trusted, and secure!  

Net Pay Advance is a licensed loan provider, locally owned and operated in Wichita, Kansas. Our No. 1 priority is helping you, the customer, by providing access to the cash you need and helping support financial independence goals with valuable, informational, and entertaining content. Stay up-to-date on our posts by following the Net Pay Advance Facebook, Instagram, and Twitter pages. Our organization is committed to transparency; learn more about our authors and editorial policy. The information provided within this blog is for educational purposes only and should not be construed as financial or legal advice. Please contact us if you have any questions.

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