Direct Loans

Direct Loans refer to loans made directly from the lender to the borrower, without an intermediary. This type of lending often involves government programs or Financial Institutions providing funds directly to individuals or businesses.

Examples:

• Federal Direct Student Loans: These are loans provided by the U.S. Department of Education to help students pay for college, with repayment terms and conditions set by the government.
• Direct Personal Loans: These are unsecured loans given by banks or Credit unions directly to borrowers for personal expenses, such as Debt Consolidation or home improvements.

Cases:

• A student applies for a Federal Direct Loan to cover tuition costs, and the funds are transferred directly to the college.
• A homeowner takes out a direct personal loan from a bank to renovate their kitchen, receiving the funds in their bank account for use at their discretion.