Loans are the necessary financial things for your every purchase like home loans for the new apartment, car loan for the automobile and business loans for your capital assets. Borrowers try to compare different options available to find the one that would pinch their pockets less. If you have been in such a situation before you would surely have turned to a loan broker for help. People appoint some loan brokers for their convenience because if you apply for some loan to the leading banks then you have to wait for one month, and you need to visit the bank branch several times to know your loan status. If you appoint some loan brokers then they will assist you for compiling your documentation and they will approve your loan from the lenders. So this is a hassle free loan process and these brokers will also help you to find out the lower interest loans available in the market.
Why do you need a loan broker?
You can apply for the loans to your nearest bank and sign the agreement with the respective bank afterwards. Once the loan agreement is signed the loan is disbursed. In this entire process, the borrower has no idea of what the prevailing market rates are and whether there are other lenders available who could have offered a better deal.
- On the other hand, a loan broker approaches different lenders and has access to different types of loans offered by different lenders. He does the market research of the current lending trends and offers you the best loan that suits your requirements.
- You can find some loan brokers who have some tie ups with leading banks and private lenders. They can easily choose the best loans with a lower rate of interest and no hidden cost for you. So you can save lot of amount during your repayment schedules and you do not need to pay any hidden cost in future.
How much will I be charged?
Most brokers will charge you an initial fee or commission if your loan application goes through, and you get a loan. It is recommended that you get to know these fees as soon as you approach a loan broker.
- Upfront Fee: This is common practice among most brokers. You will be asked to pay a fee right at the beginning of the process. Some brokers can provide you guaranty on your loan disbursement. However, it is good to remember that the broker is just an intermediary and not the actual lender so such a claim can be nothing more than a faux.
- Teaser Fee: You need to be careful about this where a broker does not charge an upfront fee. A broker may get your application processed and at the final stages of your loan process, you are asked to pay a fee. So, it is always good to check this in advance if there is no upfront fee.
- Membership or Subscription Fee: This is just another way of masking the broker fee. You are offered a few value-added services to become a member of their community. You will be promised loan rates that no others are offered and other services like free credit score check and so on.
Next time when you think of loan thinks of hiring a loan broker. However, ensure that you make yourself aware of the fees that will be charged so that you can make an informed decision. Apart from that, you can also find these loan brokers online and you can check their fees and charges on their official portals. It is better to apply for the loans through these brokers because they can assure you about the loan disbursement from their end.