Credit intermediaries are the interface between banks and credit customers. Often, dubious loan offers are also associated with them, as unfair methods by some dubious credit intermediaries keep making headlines in the past and present. But with the Internet, the nature of loan brokering has also changed.
What does credit brokering mean?
The “normal” way to get a loan is through a bank that gives the loan. However, there may also be an intermediary who brings together borrowers and lenders on a commercial basis. He supports the banks in selling their financial products and also the loan seeker through tailored offers from partner banks. For this, he receives a commission from the credit customer or the lender if the placement is successful.
The online loan brokerage continues to appear with specialized platforms of all kinds. There are loan brokers for short-term loans with a short term or credit marketplaces that bring together private or commercial investors and loan seekers. On the credit portals for private lending, the loan amounts are not made available by a bank, but by individuals or companies. Another form of online loan brokerage are platforms that operate commercially for the purpose of applying for a loan. They work with partner banks whose offers they advertise in a customer-oriented manner.
Contracts and commission
In contrast to bank loans, the borrower concludes both a loan agreement with the bank and a separate agency agreement with the credit intermediary. The brokerage contract also lists the commission for the credit intermediary as a percentage of the loan amount. The payment modalities for the commission are different. Either the borrower or the bank pays the commission directly to the credit intermediary after the loan amount has been paid out and the withdrawal period has expired, or the commission is co-financed through the loan and repaid by the borrower as part of the monthly installment payment. The intermediary then receives his money from the bank first.
There must be absolute clarity about agency costs and credit costs, which is why both credit intermediaries and banks are subject to the obligation to provide information. On the other hand, it is dubious if credit intermediaries already request commissions from the potential borrower before concluding a contract.
The dubious credit brokers charge horrendous interest, want to see money before signing a contract, charge costs that the borrower cannot understand. For this reason, the consumer is also asked to stay away.
Reputable credit brokers that live up to their calling provide loans that meet the requirements of the customer, advise them, select suitable loan offers from the bank portfolio available to you and receive a commission from the lender if the bank is a bank. Reputable credit brokers can also be found online, as a comparison quickly shows.
Special feature: credit brokerage for personal loans
Online credit marketplaces that broker loans without a bank have long been established because they have also been able to close a market gap. Lending from private lenders, who are referred to here as investors, opens up prospects even for loan seekers with difficult starting conditions and poor creditworthiness. There is also a bank here, but only for the administration of the funds and the organization of the repayment arrangements. Investors can invest in loan applications that are of interest to them and benefit from the interest yield.