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Looking for an alternative to direct lender loans?

118118Money.com
  • You could consider a credit card instead
  • Guaranteed credit limit
  • Check your eligibility with no impact to your credit score
Check my eligibility This won't affect your credit score

Representative example: Amount of credit £1,200. Interest rate: 34.0% pa (variable) Representative 34.0% APR (variable)

What is a direct lender loan?

Quite simply, a direct lender is one which doesn’t use a broker service to offer loans, and when you apply with them, you’re applying ‘directly’. Essentially, they are cutting out the middle-man. A broker on the other hand is typically a representative who works with multiple lenders with the aim of getting you a loan for which they will receive a commission for.

With a direct lender loan, you apply for credit directly from a specific lender and receive it from the same lender.  

We are a direct lender not a broker and can provide loans ranging between £1,000 and £5,000 (subject to eligibility).

But if you decide a loan is not the right option for you, our credit card with a credit limit of up to £2,000 could be the perfect alternative.

Though 118 118 Money is not a broker, we do on occasion use brokers.

Apply for a credit card from 118 118 Money with confidence
Use our eligibility check to find out what credit limit we’ll offer you before you apply, without affecting your credit rating!
Check my eligibility This won't affect your credit score
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What are the differences between a credit card and a direct lender loan?

If you’re looking for an alternative to a high interest payday loan, a credit card from 118 118 Money could provide the answer:

Dependent on your circumstances, the APR on a direct lender loan can be higher than a credit card.

 

A credit card can offer greater flexibility. You can choose to repay the balance in full, make a minimum monthly repayment or anything in between. With a direct lender loan, there will be a fixed monthly instalment to make. However, it may be possible to repay early.

 

A credit card can act as a continuous line of credit, so long as you only borrow within the agreed limit. But with a direct lender loan, the arrangement stops once you have repaid in full plus the interest.

 

Some credit cards can include additional features which you wouldn’t get with a loan. Some cards can include balance transfers, 0% purchases and usage abroad.

 

In order to differentiate themselves from other lenders or potentially further incentivise customers, some credit cards do come with rewards associated with usage. This can vary from loyalty points to cashback or even air miles. Personal loans very rarely offer this feature.

118118Money.com

Want to apply for a credit card?

  • Alternative to a payday loan
  • No fees*
  • Check your eligibility with no impact on your credit score
Check my eligibility *We do not charge any fees. However, third party vendors may have their own charges. An example of this is an ATM where a usage fee could apply.

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, 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

 

Credit Cards

Direct Lender Loans

Representative APR

Can be lower than direct lender loans

Generally higher than credit cards

Repayments

Repay in full, make a minimum monthly repayment or anything in between

A fixed monthly instalment to make, although it may be possible to repay early if you can afford to

Credit Limit/Amount

Can be used as a continuous line of credit, within the agreed limit

The arrangement stops once you have repaid the loan amount plus interest in full

 

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 £2,000.
  • 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 if you repay your balance in full each month.
  • . No late repayment fees or no cash withdrawal fees with the 118 118 Money Simple Interest Rate Credit Card, although third parties may have their own, such as for taking out cash from an ATM.
  • 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.

Apply for a payday loan alternative from 118 118 Money

Want to apply for a credit card with 118 118 Money? You can try our eligibility check first to see if you’ll be accepted before you apply – and it won’t affect your credit rating.

Read what our customers think about us

Direct Lender Loan Alternative FAQs

We are direct loan lenders, not brokers, so if you think a loan is a better option for you then you can still apply with us. We can provide loans between £1,000 and £5,000 to be repaid over 12 to 36 months.

118 118 Money loans also work on a no-guarantor basis, so you don’t require someone to act as a guarantor on the application.

The rates on our direct lender loans range from 49.9% to 79.9%. We expect more than half of our customers to get our representative 49.9% APR, although it will always be based on your unique circumstances. The representative APR on our credit cards is 34%, which is one of the reasons why you might want to consider them as an alternative.

Our interest rates are fixed, so you’ll always know how much your monthly repayments will be. Other loan companies may offer variable rates, which means your repayments could change from one month to the next.

When you’re applying for any type of credit, it’s vital that you do your own research and take the time to consider your options and ask yourself these questions:

  • Do I really need it?
  • How much do I need to borrow?
  • How much can I afford to repay each month?
  • What are the terms of the agreement?

We recommend using our loan calculator and budget planner to help you figure it out. And if you want further help, please feel free to get in touch with a member of our friendly team.

It’s important to remember that multiple applications at once can negatively affect your score. But before you apply, our eligibility checker will tell you if you might qualify for a credit card, without having any impact on your rating. We will then carry out a credit check when you apply in full.

Repaying your credit card balance in full every month can actually improve your rating, as it shows lenders that you can use credit responsibly. However, not making your regular payments will have a negative impact.

Yes, a credit card with bad credit could be an option for you. We can never 100% guarantee you will be approved, but rest assured we will look at more than just your credit score when you apply.

When you take out a credit card as an alternative to a direct lender loan, our app allows you the flexibility to manage your account in your own time. If you do have any questions, please feel free to contact us at your convenience. Our customer service team can be contacted during the following periods:

  • 8am – 7pm on Monday to Saturday
  • 9am – 5pm on Sunday and Bank Holidays

Just call us on .

Alternatively you can use our web or app chat.

If your application is declined and then your financial circumstances improve, we welcome you to re-apply after 180 days.

Our decision is based on your credit score and other publicly available information such as your presence on the electoral register and any CCJs. The higher your rating, the better chance you stand of being approved.

Your card and PIN should arrive separately in the post within 10 days.

118118Money.com

Ready to apply for a credit card from 118 118 Money?

You can try our eligibility check first to see if you’ll be accepted before you apply – and it won’t affect your credit rating.

118118Money.com