Personal Loan Broker

With countless personal loan options on the market, finding the right one can be overwhelming and time-consuming. One solution is to use a personal loan broker. Learn about their role and the benefits and drawbacks of using their services to help you make informed decision when looking for a personal loan.

What are personal loan brokers?

Personal loan brokers are professionals who help those looking for a personal loan find the best deal to suit their needs. Like mortgage brokers, they act as intermediaries, working with a panel of lenders to find finance solutions for their clients.

When choosing a personal loan finance broker, there are a few things to be aware of:

• Lending panel: brokers partner with a range of lenders, but not every lender on the market will be included in their panel. Choosing a broker accredited with a wide range of lenders gives you the widest selection of personal loans, thus maximising your chances of finding an offer that suits your personal circumstances.
• Fees: personal loan brokers will typically charge you for their services with a brokering fee. This will usually be a small percentage of the total loan amount (less than 5%) or a set sum but, depending on the size of your loan, this could be hundreds of dollars.
• Commission: lenders will often pay brokers a commission, which is a fee for successfully matching a borrower with the lender. Borrowers should be aware of the commission brokers earn because it can impact the recommendations brokers make.

How do personal loan brokers compare to getting my loan direct?

The primary alternative to using a personal loan broker is searching for a loan yourself and applying directly to the lender. This has both advantages and drawbacks.

If you do it yourself, you have complete control over the process. You can look at any lender you choose and make all decisions independently. On top of this, you won’t have to pay a fee when applying, which can save a substantial upfront cost.

However, it is important to read a lender’s eligibility criteria before you apply and ensure you meet their requirements, as applying and being rejected can damage your credit score. Using a broker can help you avoid this scenario, as they typically pre-screen lenders to match you with ones most likely to approve your application. You will also benefit from their expertise and guidance, and they may be able to find better deals than you would on your own.

One of the biggest advantages of using a broker is the time and effort saved in comparing offers – but this is still possible on your own. With Savvy’s online comparison service, you can compare interest rates, fees and other important factors to find a range of offers suited to your circumstances, taking much of the guesswork out of applying for a loan.

How do I find the best personal loan broker?

There are a number of key areas you should look at when comparing personal loan brokers. It’s important to choose one that aligns most closely with your needs and can offer you the best personal loan deals. You should consider the following:

Suite of lenders available

The number of lenders your personal loan broker is accredited with is perhaps the most important element in choosing the best available option for you. The more lenders that your personal loan broker is accredited with, the more choice you’ll have for personal financing and, as such, the greater the chance of finding the perfect loan to suit your needs. For example, a broker accredited with five lenders is less likely to be able to find you the best deal than one with more than ten lenders.

Online or in person

Most personal loan brokers operate in the online space, which makes finding one much easier and more convenient overall. An online broker sidesteps the need for appointments to be made and physical documents to be sent to an office; rather, everything is conducted in a safe online space, and you can attend to it whenever you’re free. However, there are still face-to-face brokers available for those who prefer this setup. Your preference in this regard will inform your ultimate decision on which personal loan broker to choose.

Processing speed

You may want or need your funds turned around quickly to access your personal financing sooner, so you could look to personal loan finance brokers who can do that. Each broker will be different in terms of how quickly they can get your loan approved, so you should do your research in this area. Typically, online brokers are able to get loans approved at a faster rate than those dealing with physical documentation.

The pros and cons of using a personal loan broker​