Take the hassle and stress out of finding a personal loan by using a matching service.
Personal loan brokers can also be of significant help for those with complicated situations or less-than-perfect credit history because the broker works to find a lender to fit your unique needs.
How do personal loan brokers work?
Personal loan brokers, also called lender connection or matching services, work in a similar way to mortgage brokers: they help you find a good deal on your loan.
Personal loan brokers can help you with the full range of personal loans offered by lenders. Whether you’re renovating your home or refinancing student loans, a personal loan broker can assist you with finding a suitable loan.
Personal loan brokers search for a loan within their lending network, which is simply the group of lenders that they deal with. Once they’ve found a lender willing to approve your application, the broker will present you the offer. You may have to finalize the offer with the lender directly, though some brokers are able to facilitate that portion of the process as well.
Most personal loan brokers operate solely online, so you can fill out your application and get a loan offer from the comfort of your home.
Compare personal loan matching services
Why should I consider a personal loan broker?
These lender connection services can offer you convenience. Instead of filling out multiple applications on a bunch of different lenders’ websites, you fill out one application and receive offers through the broker, saving you time.
They can find you the best loan option for your unique circumstances. They may be particularly useful if you have trouble meeting the standard eligibility criteria at larger financial institutions. This is because brokers tend to have a better understanding of different lending requirements of various lenders, so they won’t recommend products that you are likely to be rejected for.
Personal loan brokers get commissions when you’re approved for a loan, so it’s in their best interest to connect you with lenders who are likely to approve you.
How are personal loan brokers and direct lenders different?
|Personal loan brokers||Direct lenders|
|Application process||One application to be connected to multiple lenders. Takes about 10 minutes to apply.||One application for one lender. Takes around 10 minutes to apply for each individual lender.|
|Types of fees||Either no fee or an origination fee for the loan-connection service, on top of plus fees the lender charges.||Varies by lender. Fees can include application, origination, prepayment and late fees.|
|Safety of your information||Most websites are SSL-encrypted, but brokers sometimes share your contact information with multiple lenders.||Websites are also SSL-encrypted. They don’t share your information with anyone — employees usually have restricted access.|
|Typical minimum qualifications||Age of majority (usually 18), good credit, proof of income, US citizen or permanent resident.||Also age of majority, strong credit, verifiable income, US citizen or green card-holder|
How to find a good matching service
- Loans offered. Make sure the broker you are considering offers the type of loan that you require.
- Type of interest. Most brokers offer fixed interest loans only. If you’re interested in variable interest loans, be sure to look for that information on the broker’s website before applying.
- Loan conditions. Can you pay the loan off early or make additional repayments? Make sure you can access these benefits without having to pay a fee.
- Lender network. This is the group of lenders from which your broker will choose a loan. The bigger the network, the greater the chance of you getting the best deal available.
- How they work. Some brokers operate almost entirely online, whereas others use the more traditional phone, fax and mail. Make sure you’re comfortable with whichever system your broker uses.
- Funding time. Brokers have different speeds at which they are able to approve and fund your loan. If you are in a hurry, an online-based broker should be able to approve your loan faster than a paper-based one.
- Customer service. You may be dealing with the broker for the term of your loan, so make sure you are happy with the level of service they provide. Call them to see how long it takes to get an answer and find out what kind of support they offer.
What to avoid with personal loan brokers
- A small lender network. The more lenders your broker has access to, the better your chance of getting the best loan available. Make sure your broker compares a large range of options, otherwise you might as well just do it yourself.
- Commissions. There isn’t anything wrong with a broker being paid a commission, just be sure of what the commissions are and how they affect the broker’s recommendations. Less honest brokers might push lenders that pay them higher, rather than the ones that offer the best option for you.
- Fees and charges. Understand the fees and charges you’ll have to pay. Ensure they are all clearly explained to you before you commit to your broker and the loan.
- Scams. Reputable personal loan brokers don’t charge a fee for you to apply. Be wary of other warning signs like an unsecure website that doesn’t have “https” in the URL or a company without a physical address.