Pros and cons of using a loan broker

Loan brokers act as intermediaries between lenders and borrowers. Whilst it is possible in the UK to apply for loans directly from the bank, it is a good idea, due to the competitive lending market, to use a loan broker to help you with the application process. There are advantages and disadvantages of using loan brokers, but at the end of the day, you will find that the advantages outweigh the disadvantages.

Pros

-Brokers will help you to get the best loan deal, be it a mortgage loan or a car loan. Using a broker is convenient and will save you time. If you use a broker, you will not have to go through a search process on your own, and you won’t have to go from bank to bank looking for the best deal. --If they are operating independently, they will be able to give you an objective advice about different products. -Mortgage loan brokers will find the best deal which suits your individual needs and circumstances. -They can speed up the process during the application process. They will help you with completing the forms and any other paperwork. This means less administration work for you. -If you are a first time home buyer, it is a good idea to use a loan broker because he will also be able to give you an objective advice. -Loan brokers deal with a lot of companies, they are the best people to get the best loan option for you. They are experienced and qualified in the field and hence, they can get products which will suit your individual needs. -If you have a bad credit rating, it can be difficult to get a good deal on your own. You can use the services of a loan broker to get a better deal.

Cons

-Since he is the one involved in the search process, you may end up having little control over the final decision. If you are dealing with an inexperienced broker, you may even pay more than is necessary. -It can cost a lot to pay for a loan broker’s services for something which you could have done your own. -If your credit rating is good, it is easy to get a good loan deal on your own without consulting a broker. Using a loan broker will, however, save you money in the long run if you get the best deal. It is also important to find out about the fees first, so that you do not have to pay more at the end of the day. A loan broker would be the best person to help you get a better loan option.