Here at Talk Loans we are proud to say that we have NEVER charged and upfront fee for our services and NEVER WILL. We believe that brokers should only be paid if they work they do is successful – in other words, if they manage to get a loan for their client.
Unfortunately, not all brokers think the same way we do and there are many different types of fees you should be aware of. Listed below are some of the most common ones we’ve come across;
1. The Upfront Fee
This is one of the most common ones around, and probably one of the most straightforward. In this model, a broker charges applicants a fee right at the beginning of the process. You’ll be asked to fill in a short form and then shortly afterwards be invited to give your credit or debit card details.
The brokers often claim that they can ‘definitely’ get you a loan but will need to charge you a fee upfront to allow you to get the offer. The two things you have to remember are i) the broker is a broker, not a lender. They cannot possibly guarantee anything on behalf of the lender. ii) Even if they do get you an offer it may not be anything like what you were looking for.
2. The Secondary Fee
These occur when the company that you gave your card details to then sell them on to other companies who use them to take a second fee for themselves. This is really underhand (not to mention illegal!) and one of the reasons you should be really, really careful before you give your card details to anybody.
3. The Teaser Fee
This is where a broker will get you a good way through the process – they’ll have taken your application, conducted some correspondence and then just when you think you’re nearly there… Bam! They hit you with the news that they have an offer ready and waiting for you but just need you to pay a fee first.
4. The Membership Fee
Some brokers tried to dress up their Broker Fees as something else to avoid the regulations surrounding fees and to confuse applicants. To achieve this they may try and describe the fee as a membership fee to their ‘club’ – they’ll then tell you that members of their club receive special benefits and can access loans that non-members cannot.
Don’t fall for it – I have never met a lender who only offers their products through any kind of membership schemes.
5. The Extras Fee
Similar to the Membership Fee, the Extras Fee is a way that some brokers use to dress up their broker fee as something else. They’ll offer you a package of products or services that they’ve put together – for example discounts on phone bills or utility bills, shopping vouchers or travel discounts. Just be really careful with these;
i. Always ask yourself whether you really want the products or services they’re offering, remember, you went to them for a loan
ii. Take time out to have a look down the list and see whether you’re actually going to use the products/services on offer – if not it’s a waste of money
iii. Check the real value of the things being offered – a quick search on the internet may well find a lot of those items for free
Brokers who do their job properly and get you the loan you want will be paid a commission by the lender – ask yourself how confident are the brokers of getting you a loan if they’re asking you to pay any sort of upfront fee?
Give us a call on the number at the top of this page and you can talk to one of our loan experts for free and with absolutely no obligation!