When an application is made with a loan broker, they will aim to link the applicant with a suitable lender.
Loan brokers will have a relationship with several different lenders. If they are successful in providing a suitable lender and the loan pays out, the broker will receive commission.
Comparison websites such as those advertised on TV can also be classed as brokers.
In the past, loan brokers have been criticised for a number of reasons including fee charging and use of customer details.
However, all legitimate brokers will be authorised and regulated by the Financial Conduct Authority (FCA). If you’re unsure whether a credit broker is authorised, you can check the FCA register on their website.
Much like us here at Talk Loans, most legitimate loan brokers will stamp that they charge no fees for their service all over their website.
What are the benefits of using a loan broker?
Using a loan broker may reduce the chances of making unsuccessful applications. A loan broker will aim to put you in contact with the lender that best suits your needs. This can in turn mitigate the risk of lowering your credit score.
Loan brokers typically have an excellent understanding of the market. Therefore, when you speak to them, they can help you to get a better understanding of the options available to you.
Finally, a loan broker can save you time. Researching the market can be a laborious and confusing process, especially with all the options available today. A broker acts as an intermediary and removes this process from the borrower.
How to spot a find a good loan broker
When looking for a good loan broker, your first stop should be the FCA register of authorised companies. If they’re not on the register, steer clear of them.
Next, check out the reviews on a reputable website like TrustPilot. Look for companies with an overall score of 9+. Here at Talk Loans we boast an average score of 9.5, with 96% of our reviews being 5 our of 5.
If you notice any companies with several poor reviews, look out for trends in the comments. Typically, one or two bad reviews isn’t much to worry about. If however they have a handful of poor reviews all pertaining to the same reason (e.g. fees charged or poor communication) this may be an indication to go elsewhere.
Finally, give them a call. Communicating with the company will give you a feel for how they operate and treat their customers. Good loan brokers will make you feel like nothing is too much hassle, and give you a truly personalised experience.
Despite having their reputation tainted by a small selection of un-regulated firms, loan brokers can in-fact simplify the loan application process.
They can help you to find a suitable lender and get the loan that you need.« Back to Glossary Index