asked in Business+Finance by (1 cent) 1
I want to buy a car. Please, explain to me the process of indirect lending.

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3 Answers

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answered by (177 points) 5
Indirect lending is the process of lending money to someone that you don't have a direct relationship with. An example of direct lending is when a bank lends money to a customer - because there is a direct relationship between the bank and its customer. However, indirect lending is through third-parties where there is no relationship between the lender and borrower. That means if you are looking for a car loan via indirect lending, you won't be borrowing money from a borrower that you are connected with. Lending tree is a good example of indirect lending, because you are borrowing money from total strangers that you don't know - and have no connection to you. Lending tree loans are funded by individual investors that put up their own money - to lend to others - that they have no relationship with.

One final point about your car loan, you should research which type of lending (direct or indirect) can give you a better interest rate.
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answered by VISIONARY (9,003 points) 6 9 19
Indirect lending pertaining to a car is an auto borrowing that the recipient isn't dealing directly with a bank to get a loan but through an intermediary which could be a finance company or a dealership to acquire a loan to buy a car. These intermediaries work with different lenders or borrowers to get the car buyer a benefiting lender that the terms and conditions of borrowing will be favourable to the car buyer in terms of repayment. The car buyer just needs to fill an agreement form of payback and can drive home a brand new car. With this process it is the dealership that will take all the borrowing decision about the car bought by the car buyer,it's financing and punishment for defaulters
The good thing about indirect loan is that the buyer don't need to shop around for a financier the dealers does all of that.
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answered by ELITE (3,548 points) 3 7 11
First and foremost, let's talk about what is lending and it's the act or process of getting any kind of aid whether it's financial or otherwise from someone or somewhere. Now, looking at indirect lending would tell you that there is also a direct lending.
Indirect lending involves a situation whereby one gets financial assistance from a party that he or she is involved with directly. It may be one's bank, friends, family and relatives while indirect lending is when the financial aid comes from a party one isn't in any direct relationship with. It's actually more risky and expensive to get financial assistance from indirect third parties.


So, if I'm to offer you any financial advice, I would encourage you not to go for indirect lending but opt for direct lending for your car project.

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