Comparing interest rates is the best way to get as low interest rates as possible, it can actually save you thousands of dollars a month. The interest rate on loans is set individually according to your financial conditions and history. Since all lenders assess your ability to pay and creditworthiness differently, interest rates can differ greatly between different lenders. So how can you really know what is a low interest rate for you without comparing multiple lenders?
Here we go over what a loan broker is, why you should use one and the value in comparing interest rates.
The loan broker helps you compare loan rates
A loan broker is not a bank. Loan brokerage is a free service that helps you compare the interest rates of most lenders free of charge. Mortgage brokerage is becoming increasingly popular and the service is free for you as a consumer as the broker gets paid by the lender whose offer you choose to accept. Here you can read more about loan brokerage.
This list focuses on what benefits the lender does for you as a customer and for society at large.
Mortgage brokers push interest rates for you as a customer
The main advantage of comparing loans and interest rates through a loan intermediary is that interest rates are reduced. This is because the lenders are exposed to competition in a comparison, which in itself can push down the interest rate. In fact, comparing loans is no more strange than comparing flights and hotels through online comparison services.
Should you visit most banks yourself and apply for a loan, each bank will each have credit information on you. Many credit information in a short time, lowers your credit rating and thus makes your conditions difficult to get a loan with good loan terms for each bank you visit. However, if you use a loan broker, you will only receive a credit report that all banks and lenders share, thus minimizing your credit rating.
The loan broker reduces the knowledge gap between the lender and the customer
All customers want to feel that they are in good hands and the lenders are skilled at meeting each customer in a warm and welcoming way. At the same time, they are in a great deal of knowledge when it comes to negotiating loan terms where you as a customer have no insight into what interest rates you can get from other lenders.
With the help of a loan broker you can easily check how low interest rates you can get from most banks and lenders. This makes it much easier for you to determine what is actually a good or bad interest rate. In addition, you do not have to negotiate directly with the banks as they are exposed to competition, interest rates are already being squeezed.