Personal loan brokers aim to help you find a loan that meets your needs and personal financial situation. Instead of applying directly with a lender, you apply for a loan via the broker instead. The broker will then contact the lenders that they are affiliated with, as well as search the market, to find you potential options.
While it can be helpful to have a professional ensure you find a good deal, you should keep in mind that your own personal loan comparison can be quick, easy, and free.
Here's what you need to know about personal loan brokers, the potential benefits and drawbacks of using one, and how to find a reputable broker.
How do personal loan brokers work?
Personal loan brokers work in a similar way to mortgage brokers: they try to help you find a good deal on your loan.
Personal loan brokers can help you with the full range of personal loan products offered by lenders. Whether you are planning a holiday or buying a new car, a broker can assist you with finding a suitable product.
Personal loan brokers search for a loan within their lending panel, which is simply the group of lenders that they deal with. Once you sign up for their services, they will find a product from one of these lenders. Most personal loan brokers offer online applications and loan management, so there is no need to book an appointment or sign and post documents, which can save you time.
Are personal loan brokers worth considering?
Pros
- Convenience. Rather than only comparing the market yourself, a personal loan broker can do some of the legwork, (though you should still try to do at least some of your own research). You'll also have the benefit of a single contact for the total term of your loan.
- They are experts in their field. A broker is usually required to have either a Certificate IV in Finance and Mortgage Broking (FNS40815), a Diploma of Finance and Mortgage Broking Management (FNS50315) or a Bachelor of Business (Financial Planning) making them experts in their field.
- They are obliged by ASIC to protect your interests. Brokers have to have an Australian credit licence under the National Consumer Credit Protection Act 2009 in order to provide credit assistance. This means that they have an obligation to find you the best terms possible for your circumstances.
- They tailor their options. A broker can help to find you the best loan option for your unique circumstances.
- Can help bad credit applicants. Brokers may be particularly useful if you have a poor credit score or trouble meeting the standard lending requirements at larger financial institutions.
- Can help you maintain your score. Using a broker can help you maintain a good credit score by preventing unnecessary applications and potential rejections from multiple lenders. Brokers have a good understanding of different lending requirements of various lenders, so they won’t recommend products that you are likely to be rejected for.
Cons
- A broker's interests may not align with yours. Despite ASIC's measures to protect consumers from being given bad financial advice, brokers still generally work on a commission basis. This means that some brokers may be inclined to direct you towards the lender paying the highest commission, rather than the one that would give you the best deal.
- You may have to pay a broker fee. While most brokers work on commission from lenders, some may charge you for their services. On the plus side, while this will incur a cost to you, it could put your mind at rest that you are not being steered towards a higher charging lender.
- Some lenders don't work with personal loan brokers. Not all lenders choose to work with brokers. This could mean that there are better deals on the market than those that your broker has access to. This is why it's important to also do your own market research.
- Brokers cannot guarantee your rate. Brokers can accurately estimate your rate, fees, etc. for a certain loan, but they cannot guarantee them for you. Lenders still have the right to charge you more based on their view of your financial viability.
How to find a good broker
- Loans offered. Make sure the broker you are considering offers the type of loan that you require.
- Type of interest. Most brokers offer fixed interest loans only.
- Loan conditions. Can you pay the loan out sooner, make additional repayments or redraw on overpaid amounts? Make sure you can access these services without having to pay a fee.
- Lending panel. This is the group of lenders from which your broker will choose a loan. The bigger the panel, the greater the chance of you getting the best deal available.
- How they work. Some brokers operate almost entirely online, whereas others use the more traditional phone, fax and mail. Make sure you’re comfortable with whichever system your broker uses.
- Funding time. Brokers have different speeds at which they are able to approve and fund your loan. If you are in a hurry, an online-based broker should be able to approve your loan faster than a paper-based one.
- Customer service. You will be dealing with the broker for the term of your loan, so make sure you are happy with the level of service they provide. Call them to see how long it takes to get an answer and find out what kind of support they offer.
What to avoid with personal loan brokers
- A small lending panel. The more lenders your broker has access to, the better your chance of getting the best loan available. Make sure your broker compares a large range of options, otherwise you might as well just do it yourself.
- Commissions. There isn’t anything wrong with a broker being paid a commission, just be sure of what the commissions are and how they affect the broker’s recommendations. Less honest brokers might push lenders that pay them higher, rather than the ones that offer the best option for you.
- Fees and charges. Understand the fees and charges that you will have to pay. Ensure that they are all clearly explained to you before you commit to your broker and the loan. It may be worth doing a quick comparison with your current bank, just to get an idea of what you could get without assistance.
Alternatives to personal loan brokers
There are other ways to get a personal loan:
Compare rates yourself
By visiting a range of lender websites, you can get an idea of what different lenders are charging, what their eligibility criteria are and how much you can borrow.
However, this is time consuming and could be confusing for prospective loan customers who aren't sure where to look.
Compare the options in the table above
At Finder, we compare the market so that you don't have to. Compare the rates above from our table of lenders and see some of the best rates currently available in Australia.
For more information on the eligibility criteria involved in the loans, available loan amounts, features and fees of each loan, simply click "More info" to be taken to our product review page. Or, to be securely routed to the lender's website directly to submit an application, simply click "Go to site".
Why compare personal loans with Finder?
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![Image: Supplied expert advice](https://dvh1deh6tagwk.cloudfront.net/finder-au/wp-uploads/2024/05/clock.png)
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Have more questions about personal loan brokers?
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Ask a question
I’m a pensioner who wants to buy a mobile caravan worth 40,000
Hi Sonya,
Thanks for leaving a question on Finder.
Our guide for caravan loans for pensioners will take you through everything you need to know to help you find the right type of caravan loan for you.
Caravan loans are available to people in various financial situations, including pensioners. However, lenders differ on their eligibility criteria. Lenders usually have minimum income requirements and consider certain forms of income, so lenders offering caravan loans to pensioners may consider the age pension or super payments as income, or even consider income from rental payments. More specific information is provided in the table at the bottom of the page.
To get your application across the line, provide as much detail and documentation on your income streams and finances as possible.
Cheers,
Joel
I need loan about $30000,please
Hi Fatime,
Thank you for visiting Finder.
You may check our list of cheap personal loans that have competitive rates and lower fees. The minimum loanable amount is $3,000 though the approval will still depend on the Lender’s assessment of your financial situation and repayment capability.
You can use our comparison table to help you find the lender that suits you. When you are ready, you may then click on the “Go to site” button and you will be redirected to the lender’s website where you can proceed with the application or get in touch with their representatives for further inquiries you may have.
Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you. You can also contact the provider if you have specific questions.
I hope this helps.
Let us know if there is anything else that we may assist you with.
Cheers,
Ash
hi just like to know can i get $ 75o
Hi David!
Thanks for getting in touch!
I understand you want to get $75. Please know that there is a minimum amount to borrow for all lenders/brokers. On the page you are in, you can find more information about loans.
Hope this clarifies!
Cheers,
Nikki
Hello, I have been in a small car accident and my insurance is void. I am looking to borrow around 14k to repair both their car and my own.
I own a house worth around 800k with a 140k morgange and returning a rent of $800 per week. the problem is that I have started my own business which generates me around $1000 a week currently, but I have only been a sole trader for 6 months and my work income is not recognized yet by the bank. I have just launched my 2017 tax return which was delayed for particular reasons. is there a lender out there who I would be able to borrow off?
thanks
Hi CZ,
Thanks for reaching out.
Sorry to hear about the accident. Whilst I cannot guarantee that you’ll be approved for a personal loan while self-employed you may want to speak to a lender to discuss your options. It’d be best to review the page first and get helpful information on how to secure a loan with your current situation.
You can use our comparison table to compare different lenders. When you are ready, you may then click on the “Go to site” button and you will be redirected to the lender’s website where you can proceed with the application or get in touch with their representatives for further inquiries you may have.
Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you. You can also contact the provider if you have specific questions.
Hope this helps.
Cheers,
May
i am after a personal loan of $50,000 can i brow personal loans of this amount from 3 lenders
Hi Sarah,
Thanks for your inquiry.
A $50,000 loan is already a big amount and could be risky for the lender especially if it’s an unsecured loan. If you like to borrow that amount, you may like to consider getting a secured personal loan or an unsecured personal loan. These pages have a comparison table you can use to see which lender suits.
Please click the name of the lender or the “More info” link to be redirected to our review page and learn more about the lender’s loan offer, rates, and requirements as well as the pros and cons of using their loan service. When you are ready, you may then click on the “Go to site” button and you will be redirected to the lender’s website where you can proceed with the application or get in touch with their representatives for further inquiries you may have.
As for getting a loan from 3 different lenders, I’m afraid that may not be ideal as applying for several loans in just a short period of time can affect your credit history and may impact your future approval. Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you. You can also contact the provider if you have specific questions.
Cheers,
May