What You Need to Know About Loan Credit Brokers Before Using Them
A credit broker is an organisation who can help you find a loan. People would tend to approach a credit broker if they had poor credit or were having difficulty for other reasons in obtaining a loan. A broker does not lend you money, instead, the broker will search the market and find a lender who will be willing to lend to you according to your circumstances.
Sometimes the broker will search the whole of the market and sometimes the broker will only use a restricted number of companies due to an affiliated agreement with the companies on his / her panel. The broker is acting like a middle man.
Lenders will usually pay a broker a commission for arranging the loan with them and in addition to that, it is common for brokers to charge a customer a fee as well although not all do. Brokers are required to be upfront and clear about their costs and services. They must let you know that they are a broker and they must provide you with a summary of all of their fees. You can find out more information about this through Citrus Loans.
If you were to search the internet yourself, there is work involved especially if you have thin or poor credit. Lenders quote their interest rates using an APR. The lower the rate, the less you pay. It takes a bit of searching to find the best possible option with the best possible terms and conditions, checking reviews and talking to companies. This becomes even more problematic if you have poor or thin credit which is often the reason that people will turn to a broker. Some people will use a broker if they need the loan quickly and either can’t be bothered looking themselves or are short of time. The broker will complete the application process for you and a good broker will know the companies that would be the best fit for you and as long as you can find a reputable broker and don’t mind paying the fees, this could be a good option for you.
Brokers are regulated and have to work to a minimum service requirement. If you are planning to use a broker make sure that you aware of all the fees that you will be required to pay on completion of the loan.
Whether you choose to do the search yourself or whether you choose to use a broker, it is important to consider your budget. You want to make sure that you would be able to afford the loan over the term. Any loan or payment should not put you into a situation of financial difficulty. Remember if you fail to keep up with your payments, lenders will attempt to retrieve their money from you and if you have taken out a secured loan, your car or house could be at risk. A lender has the power to take you to court which will affect your credit rating for any further borrowing. If you do run into difficulty, speak to the lender immediately.