Direct Lending

A DIRECT LOAN is a loan where the consumer makes an application on their own behalf directly with the lender who will disburse funds.

Typical of these types of automotive loans, a consumer may complete a hand signed credit application at the lenders physical office or via electronic means for decision purposes. The lender would do one of three things as follows:

#1 Directly approve to you the loan with stated terms regarding the APR, the length of the contract term, and the amount of the monthly payments.

#2 Conditionally approve the loan request. Meaning, that if your request is granted, there may be conditions that you must meet prior to disbursement of funds. The actual approving lender would in this case need to send you a “Notice of Adverse Action”.

#3 Decline the application. The lender would be required to send to you, the consumer, a “Notice of Adverse Action”.

In the case of a CONDITIONAL APPROVAL, you must either meet the terms of the conditional approval (whatever they may be), or argue successfully on your own behalf for a reconsideration.

In the case of a consumer applying to a Captive finance source, this should not be considered a Direct loan application. Captive finance sources only do loans on an indirect bases. This being the case, should you as a consumer make an application to a captive finance source, you will be unable to call the captive finance source and discuss terms/conditions. They will refer you to the Dealership who is the entity that will be setting the terms within the guidelines of the captive source.