Have you also seen that there is something called loan brokers and that these have become more and more? If you have missed this, I can tell you that it is a pretty easy way to find a loan, which has several benefits. All services that make life easier for people are usually well received and this is a good example of a service where the benefits clearly outweigh the disadvantages.
Loan broker is someone who collects a number of different lenders
Simply explained, a loan broker is someone who collects a number of different lenders under the same roof and that you then submit their loan application to them, whereupon they pass it on to all the banks with which they cooperate. In the next step you will receive quotes from all the lenders who have approved your application and you can compare interest rates and fees and select the lender that you feel is best.
So you do not need to go in with all lenders and look for price information and compare interest rates etc. You also do not have to submit a number of different loan applications to different banks. Since they are collected in one place, you can reach several different directly, with just one application. You have the chance to compare prices and choose the cheapest lender and when you then borrow you have the loan directly with that lender, not with the lender.
Credit report would have been required per application
The great thing is that you only need a single credit report even though you are actually applying for a number of different lenders. If you had wanted to apply to all of them individually, a credit report would have been required per application. Having too many credit reports in their name for too short a time is also something that is usually considered negative and it can prevent you from being approved to borrow in some cases. So it is an advantage that they only do one.
If you want to take advantage of loan brokers, you should also address the disadvantages. Most lenders have about 10 banks / lenders behind them, but it is not at all close to all lenders that are active in the market. Thus, if you apply for a loan from a loan broker, you can easily compare and choose among the lenders who cooperate with them, but you lose out on other lenders. Thus, there may be a cheaper loan elsewhere.
Unfortunately, it is often the case that the major banks do not want to cooperate with loan intermediaries. A loan broker can sometimes have one or a couple of the old big banks but rarely much more than that. However, they often cooperate with quite large banks. If you think that old reputable banks have better loans to offer, you usually have to check them out for themselves.
The number of loan intermediaries has increased rapidly
A few years ago there were at most a couple of loan intermediaries and as a consumer you were a little hesitant about how they work. One of the big ones was / is Lendo, which has been around for quite some time and also advertised on TV and radio. Beyond them, however, it was quite empty. Today, there are a large number of loan intermediaries who are fighting for the interest of the borrowers.
In Sweden alone, we probably have at least a dozen loan intermediaries that are a little better and other Nordic countries, of course, have their players as well. It is a development that has in some ways exploded in recent years and you can think about exactly what it is due to.
The lending industry has always been lucrative and is constantly attracting new players. In recent years, more and more lenders and new, more modern banks have emerged trying to take market shares from the old major banks. One of the reasons why the loan intermediaries have increased in volume may simply be that there are so many more lenders and that there is a greater profit in collecting them in one place. The new lenders are also more willing to participate in this type of service compared to the old big banks (which are still often outside).
What could be better then?
It is smooth and good already today but it can of course be even better. It would be best if a loan broker could collect basically all lenders under their roof. Then you would not have had to worry about missing the cheapest loans because the lender with the best interest rate is not included. However, it is not easy to gather everyone as some do not want to be involved and others may have too high requirements etc. Lendo – which is by far the largest and oldest player – has also not managed to gather any huge amount of lenders.
Right now, it is mainly private loans that are brokered through loan brokers, but it might also be interesting for other types of loans such as mortgages. The hard thing about getting something like this to work is that you often have to negotiate with the bank on the mortgage rate in order to get the lowest possible interest rate. Ideally, you should collect your banking transactions with a bank to get the most interest discount. It becomes difficult to implement when working through loan brokers.
What needs to happen is probably that banks and lenders realize how smooth it is for us who are looking for loans to use a loan broker. You do not have to surf the net for many hours to compare interest rates and terms and you do not have to apply in several different places with several different credit information. What is convenient for us consumers is also often good for those who want to make money from us in the long run.