Choosing the Best Direct Lender for Your Loans – Salad Vs Lending Stream Vs Loans2Go
Borrowing can feel overwhelming, especially when you’re dealing with a time-sensitive financial emergency. This can be even more difficult when you’re dealing with the added stress of choosing the right lender.
Many people in their rush to find an emergency loan struggle to carry out proper due diligence, becoming victims of predatory lenders. This is especially prevalent among those with a poor credit score or unsteady income.
Coming to the rescue for financially struggling UK residents are ethical direct lenders. Direct lending is a type of private debt offered by FCA-regulated non-banking lenders. You can apply directly for a loan from these lenders, bypassing intermediaries, which helps speed up the application and approval process while ensuring complete transparency between lenders and borrowers.
Ethical direct lenders also offer loans to individuals with poor credit scores, by using alternative, fairer methods of affordability assessment, making credit more inclusive.
In this article, we make a direct comparison between three of the best ethical direct lenders to choose from when you are in a financial emergency, including Salad, Loans2Go, and Credit Spring.
Lenders Profiles
Salad
Salad is a UK-based direct lender focusing on fair lending. Their credit decisions aren’t based on credit scores but rather use open banking for initial assessment. You can borrow up to £2,000 for a tenure of 12 or 18 months.
Salad offers rapid approval and loan disbursal. In some cases, the money can be credited to your account in 2 hours. Salad loans can be highly beneficial for those who need a smaller loan amount to meet an emergency. It can be especially beneficial for those who can afford the loan but are struggling due to an unfairly determined poor credit score.
Loans2Go
This is a direct lender that has been in the industry for two decades and offers unsecured personal loans up to £2,000, and tenures of 18 or 24 months. As a direct lender, you can borrow from them even with a poor credit score. Applying for loans with Loans2Go doesn’t impact your credit history.
Borrowing from Loans2Go is ideal for those who want to borrow a modest amount and enjoy flexible repayment terms, and who are struggling to get a traditional personal loan due to a bad credit history.
Lending Stream
Lending Stream is a direct lender offering short-term loans as an alternative to payday loans. While first-time borrowers can access between £50 and £800, existing borrowers can borrow between £100 and £1500.
The platform doesn’t charge any hidden or early repayment fees. You can apply at any time during the day. It is ideal for anyone looking for quick access to funds but who needs more lenient repayment terms, unlike payday loans, which require repayment by the end of the next pay cycle.
Comparison of The Three Leading Online Direct Lenders
| Category | Salad | Loans2Go | Lending Stream |
| Eligibility Criteria | Employed adult UK residents who have been in their current employment for more than 6 months | Must be a UK resident, with a minimum age of 21 years. The borrower must be currently employed and needs to have a UK bank account or debit card. | To be eligible, you must be over the age of 18 and residing in the UK. The borrower must also have a valid UK debit card and bank account, and must have a minimum income of £400 |
| Loan Size and Terms | You can borrow up to £2,000 with repayment periods ranging from 6 to 18 months. | You can borrow £250-£2,000; repayment period of 18 to 24 months | New borrowers can access £50-£800. Existing borrowers can avail of £100-£1,500; repayment period of 6 to 12 months |
| Loan Types | Small loans, quick loans, bad credit loans, cash loans, short-term loans, emergency loans, loans for nurses, teachers, and NHS staff, 300 credit score loan | Online loan, direct loan, small loan, same day loan, unsecured loan, emergency loan, bad credit loan, debt consolidation loan | Short-term loans, bad credit loans, payday loans, same day loans, direct lender loans, small loans, quick loans, unsecured, and emergency loans |
| Early repayment | Allowed | Allowed | Allowed |
3 Key Factors To Consider When Choosing a Direct Lender
Choosing the right direct lenders can mean a quick, simple application process and easy access to funds when in a financial emergency. Some key factors to consider when applying for emergency loans with less-than-ideal credit scores:
Application Process
Ask the potential lender how long the application takes to complete, how soon the money can be disbursed, and what the approval process entails. Three of the leading UK direct lenders we’ve discussed use open banking systems to check for affordability, which doesn’t affect your credit score.
Amount That Can Be Borrowed
When applying for loans, check if the provider offers the amount you require. For instance, if you need £1,800, going to Lending Stream isn’t helpful, as the upper limit is £1,500. In such cases, Salad or Loans2Go might be the right choice for you.
It is a good rule of thumb to choose the minimum amount that you need to tide you over an emergency. The more you borrow, the higher the financial risk that you place yourself in.
You must also ask about the APR and repayment periods before applying for the loan. The websites usually have online loan calculators allowing you to determine whether you can afford it.
Eligibility
Before applying for loans on Salad, Lending Stream, or Loans2Go, check whether you are eligible. The criteria would generally depend on your minimum age, residency status, employment status, and, in some cases, the minimum monthly income.
The three direct lenders on our list do not conduct credit score checks, but instead use an Open Banking-based affordability assessment system to check your loan affordability.
How To Avoid Loan Sharks or Fake Lenders?
Financial emergencies often make you feel desperate, especially if you are already struggling with your personal finances and have a poor credit history. This can make you make impulsive decisions or trust the “best offer that you can get”.
Such desperate conditions make you vulnerable to loan sharks or scammers. Here is how to avoid becoming a victim of a scam:
- Most direct lenders offer bank transfer; the money will be directly sent to your UK bank account. Loan sharks may prefer to transact in cash to prevent a money trail.
- Avoid any loans that don’t come with paperwork or a contract.
- If the terms and conditions are vague, and the APR, borrowing tenure, or charges are not explicitly mentioned on the website or clarified by the agent, avoid the lender.
- If the lender isn’t regulated by the Financial Conduct Authority (FCA), avoid borrowing from them.
Conclusion
Salad, Loans2Go, and Lending Stream are three of the leading direct lenders in the UK that offer transparent, quick loans to those in financial emergencies but lack a good credit score.
So, which is the best direct lender?
All three lenders have their own merits, and who you choose to partner with will depend on your individual circumstances, needs, and affordability.
