Loan matchmaking explained: 6 things you should know

Using a loan matchmaking service can be a great way to get a personal loan that suits your needs – and a better deal on it too!

So, how does a loan matchmaker work? We've broken down the key things you need to know.

1. It can save you time on searching manually

If you're not a broker, navigating today's lending landscape can be a pretty tricky process. There's a huge range of lenders to choose from, and it's not always immediately clear which one is the best option.

But working with a loan matchmaker can speed up the process significantly. One example is Lendela, which specialises in personal loans.

Lendela lets you set the parameters for the loan you're seeking – you can see an example in the loan calculator below.

The entire process is online and can be completed within minutes. Once you apply, you can start to receive loan offers within 2 minutes from a range of established lenders to match your needs.

2. You're able to find a lender that suits your needs

Everyone's financial situation is different. Accordingly, it's important to look for a lender that you feel comfortable borrowing from and partnering with for the duration of the loan.

As some loans can have repayment terms of up to 5 years or more, finding the right lender is important for you and your immediate future.

Using a loan matchmaking service allows you to do some filtering of prospective lenders before you decide to accept a loan. Lendela partners with a range of different lenders to suit different financial needs.

Once you apply with Lendela, you are presented with a selection of offers within minutes. From there, you can compare interest rates, fees and repayment terms to find the right loan for you.

You can find some suggestions on avoiding predatory lenders right here on Finder, too.

3. It can get you a better loan overall

Expanding your loan options gives you a better market overview for you to compare and choose the right personal loan. It can make a huge difference in your budget and your financial future.

However, using a loan matchmaker such as Lendela doesn't just allow you to easily find loans, it can also mean that you get a better loan overall.

As noted by Moneysmart, choosing the right loan can lead to you saving a significant amount of money on interest rates and fees.

To ensure you find the right loan, you need to make sure you've explored a range of options. Using a loan matchmaking service is a way to do this.

Using a loan matchmaker such as Lendela doesn't just allow you to easily find loans. Each loan offer is tailored to your profile, taking into consideration your credit report and bank transactions, that can directly influence loan affordability.

This means that you get a better loan overall by showing you your loan choices, the rates you have access to and their costs.

4. You can streamline your application process

Individual loan applications can be time-consuming – and sometimes even costly!

Most personal loan applications take between 5-20 minutes to complete and involve identity checks, financial documents and more.

Doing this more than once will become a real inconvenience; not to mention that if you apply for multiple loans within quick succession, your credit score can take a hit.

Working with a loan matchmaker can help avoid these issues. For example, when you apply for a loan with Lendela, you can view loan offers from multiple lenders within 2 minutes after submitting just one application.

You won't need to share your data more than once because Lendela is already connected to multiple lenders. And if you decide to proceed with a loan offer, you can apply for future loans using the same profile.

5. Using one doesn't impact your credit score

One of the concerns people tend to have about using third-party financial services is the impact they can have on your credit score.

But let's take a look at how this works. There are 2 types of credit checks: a "soft" credit check and a "hard" credit check.

Hard credit checks stay on your record and if you have too many in quick succession it can potentially raise some red flags with lenders. This can hurt your credit score in the long run, as multiple rejections or having multiple loans on the go isn't always the best look. You might even see your loan interest rates go up as you shop for more loans.

However, Lendela uses a "soft" credit check. Although your credit history is checked, it's not a check taken into account when lenders consider your creditworthiness.

A hard credit check may be carried out when you apply for a specific loan – however, this is a standard process carried out by the lender themselves, not Lendela, and only done after you select your preferred lender.

6. It doesn't have to cost you anything

A good loan matchmaker should be able to help you minimise costs – not add to them!

So when you're looking at using a loan matchmaker, make sure you look for one that doesn't charge additional fees.

Lendela is a loan matchmaker that offers a completely free service. Additionally, Lendela is independent; it's not tied to major banks or other financial institutions, so you'll be able to get a broad and unbiased view of the loans available to you.

Having resources like this available can help reduce the costs and pains of taking out a loan, even before you've officially finalised your loan with a lender.