Online loans direct lenders are companies that receive and process your online loan application, and fund your loan. They also process your loan payments and conduct any additional service on your loan. A few things to keep in mind when working with online loans direct lenders:
State licensed online lenders are licensed in each of the states in which they operate in (that they are required to be licensed in; some states do not require licenses). To check to see if online lenders are state licensed, look for their rates and terms pages, which typically display a copy of their license. State licensed lenders will:
Credit Access Businesses & Credit Service Organizations
Credit Access Businesses (CABs) and Credit Service Organizations (CSOs) obtain credit for consumers from independent third-party lenders - typically in the form of payday loans or title loans. The CAB/CSO will process the loan application and the third party lender will fund the loan.
A tribal lender is a lender that is based on a federally recognized American Indian reservation, or is operated by an American Indian community. In the United States, tribal lenders can provide many of the same online loans as traditional lenders. However, tribal lenders may be able to avoid some of the state law restrictions that are placed on state-licensed lenders, because the United States government recognizes these entities as their own independent sovereign nations that govern themselves within U.S. borders.
Simply put, an offshore lender is one in which is based in another country but lends within the U.S. Offshore lenders are not regulated by the states in which they operate in, so you will not get the same level of security in working with an offshore lender as you will with a state-licensed lender. When borrowing from an offshore lender, it may be problematic to resolve any issues.
When working with an offshore lender, be wary of:
Loan Matching Services
Some online loan companies are actually loan matching services, also referred to as “lead generators”, which serve as a middleman when borrowing cash loans online. When using a loan matching service, you will fill out your loan application on their website (sometimes, only a partial application), and then they will sell your information to third party lenders. The lender that buys your information will then fund your loan if approved. Typically, you can pinpoint a matching service in the website disclaimer, which usually will say something like "the operator of this website is not a lender" or "match you with a lender".
A few things to keep in mind when working with a loan matching service: