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A lot of people associate brokers with mortgages, but there are also personal loan brokers. It's not surprising many of us need help, given personal loan borrowing was at record highs in 2023.
Particularly if your finances are complex, a personal loan broker can make it easier to get a loan.
BUT there are trade offs you should know about before deciding if using a broker for your personal loan is a good idea.
A personal loan broker is a finance professional who helps you get a personal loan. They work as an intermediary between borrowers and lenders. Ideally, they will help you find the most suitable personal loan offer from a selection of lenders.
Some brokers specialise in helping certain kinds of borrowers, such as people looking for bad credit loans or self-employed workers who need a low doc personal loan.
There are also specialist car loan brokers.
If you use a personal loan broker, they will usually ask a series of questions related to your financial situation and the purpose of the loan (e.g. debt consolidation, medical loan, etc.). Based on your information, a broker will:
Assess their pool of lenders and decide which ones may be suitable.
Present you with their recommended personal loan options.
Deal with a lender on your behalf once you’ve decided on a loan and advise on how to get your personal loan application approved.
Personal loans brokers work with banks, credit unions, online lenders and other institutions that offer personal loans.
They don’t work with all lenders in the market. Each broker typically has a relationship with a pool of particular lenders.
This is an important factor when weighing up the pros and cons of working with a personal loan broker.
Some personal loan brokers charge a fee for their services which can be as high as $990. You’ll generally have the option to pay this fee directly to the broker without adding it to your loan amount.
If you choose to add it to your loan amount, you are also agreeing to pay interest over the loan term on it.
In addition to the personal loan broker’s fees, there may be additional upfront fees payable to the lender.
Not everyone needs to use a personal loan broker. In fact, it can be very easy to find and apply for a personal loan yourself.
And of course you can use online tools like a personal loan calculator to help crunch the numbers. But for a lot of Australians, personal loan brokers offer a very valuable service.
Which category do you fall into...
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GET STARTEDGET STARTEDIf you decide that working with a personal loan broker is the way you want to go, here are some pointers to help find the best one you can.
Like any other product or service, there are good brokers and ones you want to avoid.
A little research can go a long way to help you find a good broker. After all, with a personal loan that you could be repaying for up to seven years, spending some time understanding your options will be well worth it.
Let us know who you are and what you're looking for. A little bit of information goes a long way in helping us find the right loans for you.
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The great thing about personal loans is they can fund almost anything. They are perfect when you need that bit extra to cover expenses, start a project or reset your finances to get back on track.
*Information about comparison rates: Comparison rates are designed to allow borrowers to understand the true cost of a loan by taking into account fees and charges, the loan amount and the term of the loan. The comparison rate is based on an unsecured fixed rate personal loan of $30,000 over 5 years. WARNING: Comparison rates are true only for the examples provided and may not include all fees and charges. Different terms, fees or loan amounts might result in a different comparison rate.