How Personal Loan Brokers Help Your Loan Application Process

personal loan broker in South Africa
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A personal loan broker helps borrowers through a personal loan application process – from understanding your requirements to disbursement of loans. Personal loan brokers can be indispensable in saving you time and money, as they already have industry expertise and deep insight into the loan application process.
Before you decide to contact a personal loan broker, we advise you to fully understand personal loan brokers, how they operate and what to watch out for. By reading this article, you will be well-informed about partnering with the right loan broker.

What Do Personal Loan Brokers Do?

Since personal loans are generally unsecured loans, you can expect to pay higher annual interest rates on the amount you borrow. Currently, the annual interest rate can range between 7,75% and 28,75%. With such varying interest rates, loan terms and conditions, it can become especially difficult to decide on the right personal loan to suit your needs.

Overall, a loan broker acts as a ‘middle-man’ between you and a financial institution. As financial professionals, personal loan brokers are responsible for helping people find the most suitable personal loan. Depending on the broker, you may have to pay an up-front fee or your broker may earn a commission from the financial institution.

This process begins with your broker gaining an accurate assessment of your current financial situation and goals. Depending on what you can afford and the reason for needing a personal loan, your broker will then decide which personal loans and lenders would be ideal for you.

How Do Personal Loan Brokers Help You Get a Loan?

Finding a loan through a personal loan broker can allow you to fully determine all your options without the tedious task of contacting individual lenders. This means you can compare interest rates, loan terms, and lenders that would be most beneficial to your financial situation without any pressure to make a decision.

Once you have considered your options and made a decision on the lender and loan, the job of your loan broker isn’t over. Beyond understanding loan offers, your personal loan broker should also be knowledgeable about the loan application process.

Overall, you can expect your personal loan broker to help you secure your loan by helping you put forward a great application. This includes advising you on how to apply, what documents you will need, and what you should expect from the process. Ideally, your personal loan broker should also help you negotiate the best possible interest rate or loan term.

What Are the Benefits of Using Loan Brokers?

Loan brokers make the daunting experience of finding and securing a personal loan easier and more efficient. As financial experts, loan brokers have the background knowledge and insight needed to review and interpret loan offerings to determine if you would be a suitable candidate for the lender.

Going directly to a lender or your existing bank to discuss your personal loan options can leave you feeling jaded. Lenders often do not have the time to build a rapport with you or look at the big picture when it comes to your finances. Loan brokers are financial professionals who will consider your financial situation, future plans and needs before making any suggestions.

There is also the added benefit of being able to compare loan offers without rose-tinted glasses. Going through a third party allows you to review lenders and their offerings objectively to make a smarter decision.

Finally, many loan brokers will keep in touch with you following the success of your loan application. This gives you peace of mind in the event that you are not satisfied with your current loan and repayment or need to refinance.

Here at BetterLoans, we’ve designed a quick and easy way to request loan offers from trusted NCR-registered lenders. Simply head over to our personal loans page to compare offers or browse interest rates, loan terms, fees and other lender information. Did we mention that our loan-finding services are also free of charge?

Who Would Benefit from Using a Loan Broker?

Whilst anyone who is considering taking out a personal loan can benefit from having a loan broker, there are circumstances in which contacting a broker can make the loan process markedly easier.

If you cannot dedicate the hours to research the current personal loan offerings or aren’t particularly financially savvy, contacting a loan broker would be a wise decision. Additionally, if your credit score is poor or you already have an issue with accumulating debt, a loan broker may help you to explore your options outside traditional lenders.

Finally, entrepreneurial individuals who own their own businesses or receive an irregular income may benefit from the financial expertise a loan broker can offer. Having a unique financial situation or not being aware of the way loan offers are made can result in rejections, unnecessarily high-interest rates, or undesirable loan terms.

What to Consider When Choosing a Personal Loan Broker

To ensure that you choose the right personal loan broker and make the most out of their services there are a few things you need to keep in mind. Before contacting a broker, sit down and assess your financial situation and reasons for needing a personal loan.

Make a note of all your concerns and questions, as well as an idea of what you’re looking to get out of the experience. It can also be helpful to gather helpful documents such as your payslip, quotations, debt notices etc.

It is always a good idea to do your background research on potential personal loan brokers. Whether it’s a quick Google or LinkedIn search or asking friends and family, it is very important to know that you are in capable hands.

Ideally, a personal loan broker should have some financial training or education as well as some experience in the financial field. Red flags to look out for in personal loan brokers can be poor communication, making hasty decisions without completely assessing their client’s needs, and lack of experience/training.

It is important to remember that personal loan brokers may be affiliated with specific financial institutions. This can mean that your personal loan broker may receive an incentive for selling you a specific financial product. So be sure to ask about their relationship with financial institutions and possible commissions to ensure that you are receiving the best deal on your personal loan.

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*Representative example: Estimated repayments of a loan of R30 000 over 36 months at a maximum interest rate, including fees of 27.5% APR would be R1 232.82 per month. BetterLoans is an online loan broker and not a lender. Our service is free, and we work with NCR-licensed lenders in South Africa. Interest rates charged by lenders can start as low as 20% APR, including an initiation and service fee determined by the lender. The interest rate offered depends on the applicant’s credit score and other factors at the lender’s discretion. Loan amount R500 – R350 000. Repayment terms can range from 3 – 72 months. The minimum APR is 5%, and the maximum APR is 60%.

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