Should I Pay A Brokers Fee For A Personal Loan
There are a number of brokers out there who will charge an upfront
fee for sourcing a loan, they may well find a suitable loan for a customer but if you're
looking for a loan because you are short on cash then why pay an upfront fee, this will
only make you even shorter on cash. If your credit rating is reasonable then your bank or
the high street banks will most likely offer you the best rates. For those with credit
problems or who have been refused from the high street banks then a broker who does not
charge an upfront fee may well be your best option.
Loan brokers who do not charge fees tend to earn commission from
the lender if they successfully source an appropriate loan for the individual. The
individual is in control they will receive detail of the loan, monthly payments and APR,
if they are happy with these then they will need to sign the declaration and provide all
relevant documentation such as proof of ID, address and income.
Loan brokers who do charge upfront fees in the region of £40- £80 tend to
charge this fee before any paper work has been presented to the individual. They operate with
intrusive email marketing campaigns. They operate call centre's where operators tend to read
from a pre-determined script (not specific to the individual). If a refund of the upfront fees
where required this tends to be extremely difficult to obtain, such as calling premium rate
phone numbers then being left on hold, even then the individual is not guaranteed to get
through to anyone nor retrieve their money back. By law the Consumer Credit Agreement
states that if no loan is provided the maximum amount which can be held by a firm is £5
for admin. So if you are in this situation and you have tried to retrieve you money form
a fee charging loan broker then you can take your complaint to the Financial Ombudsman.
Either way if you are trying to obtain an unsecured personal loan from a
loan broker their firm should be listed on the
Office of Fair Trading's Consumer Credit
Licence register.
Be careful, and don't provide your bank details unless you are sure who
you are dealing with!
About the author:
Steve Wentworth formed his firm Wentworth Financial Services Ltd in
November 2007 and has been in the Mortgage Industry since November 2002. For an
unsecured personal loan with no broker fees
complete you details here.
Or if you already have a loan and you would like a quote for
cheap payment protection insurance.
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