Utilise the time and the expertise of a professional broker to take the hassle and stress out of finding your next personal loan.
Finding a personal loan can take a lot of time, effort and stress. By using a personal loan broker, you needn’t waste time searching around for a loan. A broker can help you find the option that is best suited to your situation and requirements and you’ll also have the benefit of a single contact for the total term of your loan.
Personal loan brokers can also be of significant help for those with complicated situations or poor credit scores, who are typically rejected by traditional lenders.
How do personal loan brokers work?
Personal loan brokers work in a similar way to mortgage brokers: they help you find a good deal on your loan.
Personal loan brokers can help you with the full range of personal loan products offered by lenders. Whether you are planning a holiday or buying a new car, a personal loan broker can assist you with finding a suitable product.
Personal loan brokers search for a loan within their lending panel, which is simply the group of lenders that they deal with. Once you sign up for their services they will find a product from one of these lenders. Most personal loan brokers offer online applications and loan management, so there is no need to book an appointment or sign and post documents, which can save you time.
Personal loans brokers you can apply with
Why should I opt for a broker?
Personal loan brokers offer you convenience. They can find you the best loan option for your unique circumstances. They may be particularly useful if you have a bad credit score or trouble meeting the standard lending requirements at larger financial institutions.
Using a broker can help you maintain a good credit score by preventing unnecessary applications and potential rejections from multiple lenders. Brokers have a better understanding of different lending requirements of various lenders, so they won’t recommend products that you are likely to be rejected for.
Loan brokers often have different minimum loan amount requirements to the lenders themselves. Some credit unions and smaller banks will lend as little as $2,000 unsecured, whereas brokers typically won’t deal with less than $5,000. If you only need a small amount to avoid using a credit card then a broker isn’t suitable for you.
How you can find a good broker
- Loans offered. Make sure the broker you are considering offers the type of loan that you require.
- Type of interest. Most brokers offer fixed interest loans only.
- Loan conditions. Can you pay the loan out sooner, make additional repayments or redraw on overpaid amounts? Make sure you can access these services without having to pay a fee.
- Lending panel. This is the group of lenders from which your broker will choose a loan. The bigger the panel, the greater the chance of you getting the best deal available.
- How they work. Some brokers operate almost entirely online, whereas others use the more traditional phone, fax and mail. Make sure you’re comfortable with whichever system your broker uses.
- Funding time. Brokers have different speeds at which they are able to approve and fund your loan. If you are in a hurry, an online-based broker should be able to approve your loan faster than a paper-based one.
- Customer service. You will be dealing with the broker for the term of your loan, so make sure you are happy with the level of service they provide. Call them to see how long it takes to get an answer and find out what kind of support they offer.
What to avoid with personal loan brokers
- A small lending panel. The more lenders your broker has access to, the better your chance of getting the best loan available. Make sure your broker compares a large range of options, otherwise you might as well just do it yourself.
- Commissions. There isn’t anything wrong with a broker being paid a commission, just be sure of what the commissions are and how they affect the broker’s recommendations. Less honest brokers might push lenders that pay them higher, rather than the ones that offer the best option for you.
- Fees and charges. Understand the fees and charges that you will have to pay. Ensure that they are all clearly explained to you before you commit to your broker and the loan. It may be worth doing a quick comparison with your current bank, just to get an idea of what you could get without assistance.
Have more questions about personal loan brokers?
Does it cost more to use a personal loan broker?
You may have to pay a monthly fee for using a personal loan broker, but you can try to negotiate this down when signing up for the service. All brokers make money through commissions, which are paid to them by the lenders they recommend. This is not directly added to the cost of your loan or interest rate.
Selecting the right loan requires analysing the application fees, monthly fees and interest rate. If you don’t have time to compare personal loans yourself, using a broker could save you a considerable amount of money over the life of the loan.
Can I take out a loan from my current bank via a broker?
Brokers offer products from lenders that are within their lending panel, that is, lenders that they have a relationship with. If your current bank is within the broker’s lending panel and it offers a competitive product, then yes, you might end up borrowing from your current bank. However, your broker should be looking for the best value option for you.
Can I stop using the broker’s services, or switch to another broker, once I have my loan?
This will depend on the terms and conditions of your contract. Make sure you read and understand all of them before you sign on the dotted line. You will generally need to cancel the loan and take out a fresh one if you wish to change brokers.