As you start to run your business or shop for cars, you may find yourself in need of a loan. The search for your best option can quickly overwhelm you – there are hundreds of options, many of which promise speed, too-good-to-be-true interest rates, or just don’t feel right. At that point, you may want to visit a personal loan broker.
A personal loan broker is a person who speaks the language of finance fluently and can help you navigate the world of borrowing. There are a few things you should know before you contact one and get the ball rolling.
Scroll down for a close look at personal loan brokers and what exactly they do.
The loan process
Anyone in need of a personal loan should start with a breakdown of what exactly they want or need to pay for and what they can pay back each month. Remember, each loan comes with a structured payment plan that includes interest, so make sure you go in with a clear expectation of what you can afford to borrow and how quickly you can pay it back.
You should find your own credit score with a free credit check so you know ahead of time if there are any red flags on your record. If so, you want to get ahead of them and be the one to bring them up with your broker and how you plan to improve your relationship with lenders in the future.
Have physical or digital copies of your bank statement and your last two payment stubs ready to show your lender. He or she will need it to confirm your finances and help you find a way to pay your loan back.
Then you need to choose the right loan. This involves looking at interest rates, different fees, timelines, and many other factors. It’s at this point that you’ll want a personal loan broker.
How a personal loan broker can help
Loan brokers excel at loan hunting. They can easily compare several different offers and help you understand the benefits and drawbacks of each one. A personal loan broker who works independently gets the same fee no matter what loan you choose. However, one who works with the same group that does the lending will always push you towards a loan that gives them a higher rate.
You might not mind going for the latter option, but a personal loan broker should always work in your interest, no matter the potential commission for him or her.
Personal loan brokers can also make the borrowing experience much more convenient for you. They can review the available options or lending panel before you meet and only present you with the best options, saving you a lot of time. Many personal loan brokers work online and can do all the searching on your behalf so you don’t have to worry about digging up that golden, affordable loan on your own.
These professionals uphold Australia’s responsible lending laws. That means they cannot offer, enter into, or even suggest a credit contract to you that is not in your interest. It’s much easier to sign up with a personal loan broker knowing he or she cannot swindle you without putting his or her own job at risk.
Best of all, a personal loan broker can help you maintain your credit score. Any time you get rejected for a loan your credit score can fall. A personal loan broker can help you apply to the right people and walk you through the process so your score doesn’t lower. If you already have a less-than-stellar credit score, your personal loan broker can help you find lenders that will work with you.
The main downside to a personal loan broker is the cost. All brokers need to be paid for their time and expertise, so you’ll have to factor your broker’s rate into your budget. If that isn’t realistic for you, you can go it alone. But, a personal loan broker is almost always the better way to go, particularly if this is your first loan, if your credit score is low, or if you want to get a more broad, inclusive set of potential lenders.
Your broker also can’t set a rate or guarantee one for you. The best he or she can do is an estimate based on past loans, your credit history, and your financial situation. Keep in mind that fees can go up after you choose a loan because your intermediary wasn’t able to lock in a rate for you.
Questions to ask your personal loan broker
When you sit down with your personal loan broker, have a list of questions handy so you can focus on getting your money.
Here’s a good set to help you get started:
- What fees do you charge? Personal loan brokers don’t work for free, so get yours to clarify any costs upfront.
- How do you make a commission? If your personal loan broker works independently, then his or her commission won’t change as they choose different lenders. However, some get a higher paycheck based on who they work with and that means you might not get the best loan for you in the end. Make sure you know of any potential bonuses your broker may receive based on what you choose.
- What are the terms and conditions of this loan? Don’t be afraid to take your broker to task on the ins and outs of the loan’s structure. Your personal loan broker should have all the information ready for you. If they stumble over the rules or fees of the loan, you may need a different representative.
- How many lenders are in your lending panel? With loans, more is more. A wide array of options means you get a better rate, a better payment structure, and more help with fees. Look for a personal loan broker who can help you see as many options as possible.
Find your personal loan broker at LendEasy
At LendEasy, we let you speak to a personal loan broker over the phone, online, or in person. We know you need to get your financial issues solved right away, so we work hard to get you your money fast.
Want to speak with one of our brokers? It’s easy. Book a discovery call and one of our professionals will walk you through the process, help you find several options for you to consider, and get you your money fast.
Don’t go it alone. Let one of our personal loan brokers help you get what you need today. Contact us here.