Credit intermediaries: helpers or rip-offs?

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The provision of credit for business people has a long tradition and is also becoming increasingly popular with private consumers. The tradition of providing credit services goes back to ancient Rome. Even then, the reasons for using credit intermediaries were varied, as they are today. If a customer’s house bank no longer approves a loan or the customer wants to save the effort of comparing the terms of a loan, then a credit broker is used. Private customers, organizations, small and medium-sized companies and even international corporations commission credit intermediaries to select a suitable lender.

Extensive research, excellent contacts in the financial world, a comprehensive market overview and specialist knowledge of the financial business are required to be successful as a credit broker. In addition to the reputable providers, there are also dubious companies with credit intermediaries who want to take financial advantage from a complicated situation or from the lack of specialist knowledge of the client. The offers of the credit broker, the fees and the methods of acquiring customers can be used to determine whether a credit brokerage company is working properly.

The market situation

The market situation

Credit brokers advertise their services in the print media, on the Internet and even on television and radio. Not every provider has the advantage of the customer in mind. The range of providers ranges from intermediaries for small loans who sell package deals on behalf of their partners to banks and financial institutions, to credit intermediaries who simply drive up costs for consumers to black sheep who only promise the impossible and then cannot arrange a loan. The market situation for credit intermediaries is just as confusing for laypeople as the market situation for loan conditions.

The comparison of a few essential characteristics of the providers in the loan brokering enables the assessment of the seriousness. Few people know that reputable credit intermediaries receive their fees from the bank, not from the loan seeker. Other arrangements can be made with the credit intermediary. However, there is no legal requirement that the client and customer automatically pay commissions to the credit intermediary.

Advantages of hiring a credit intermediary

Advantages of hiring a credit intermediary

Credit intermediaries often have explicit knowledge of the providers of credit. Large banks and small private banks can set different standards when assessing a customer’s creditworthiness. Sometimes a favorable loan is granted for individual reasons, where other lenders refuse. Expertise in financial matters enables the credit intermediary to compare the loan terms. Details of the interest rate, the repayment terms, the processing fees and the credit protection can often only be compared with one another if you have solid financial knowledge. A competent credit broker can save his client a lot of money on large loans if he finds providers with favorable conditions.

Bank negotiations are more complex the larger the loan agreement. Not every private customer has the negotiating skills to successfully conduct bank discussions. Companies often lack the time or human resources. The credit intermediary takes on this task. Large loan amounts are more likely to justify a loan broker than small loans. The ranking lists of the comparison portals on the internet on the subject of loan terms for small and medium-sized loans are not to be regarded as full credit brokerage. The comparison portals for credit brokerage companies are much more informative for consumers and companies.

Characteristics of Our Loan Agents

Characteristics of Our Loan Agents

Credit intermediaries who make fee claims before they begin can be considered dubious. You can have the customer pay for additional costs such as fax, telephone, letters, consultation times and travel routes. This often happens before arranging a loan. Large-scale promises about a 100% success rate, loans in any amount and the waiver of creditworthiness also indicate a dubious way of working, such as unannounced home visits, coupling transactions with life insurance, residual debt insurance or other insurance.

Rapid offers for a complete reorganization of the financial situation, which goes hand in hand with a complete transfer of all liabilities and insurance to a new lender, also often point to a loan brokerage that cannot be in the interest of the customer. Reputable credit brokerage companies also point out to a customer if the credit rating actually excludes another loan at the moment.

To summarize again: Is a credit broker more of a helper or a rip-off?

Credit brokerage is a traditional line of business in the financial sector, which should be used by consumers and companies, especially for large loans. Credit intermediaries enable new contacts to banks with more favorable conditions or other risk assessments. Qualified credit intermediaries can provide excellent support in the event of temporarily difficult creditworthiness or complicated bank negotiations.
Assessment portals on the Internet help you choose a reputable and competent credit broker. Realistic service descriptions, concrete representations of interest and loan conditions and payment of the agency service by the bank, not by the customer, are important characteristics when choosing a credit broker.

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