Personal Loans and Credit: Is The Bank Your Only Option?


Most of us like to keep all our financing in one place, with one institution. We do it because it makes our lives easier, but it also makes us complain about the shoddy service and high charges that we often get from banks.

Shopping around and ending up with accounts here, there and everywhere isn’t everybody’s cup of tea, but it’s not the only alternative option you have.

Loan intermediaries are brokers

Chances are, your insurance policies aren’t all with one institution, but you have an insurance broker who manages your policies so that you only ever have to talk to one person about insurance-related matters.

A loan intermediary has a similar way of working. These companies shop around and find the best value options for their clients from a variety of financial institutions. They handle the interactions, and you only need to deal with one company.

STK Finans in Norway is a great example of a loan intermediary. Apart from arranging loans for their clients, they give advice on refinancing, help you by obtaining vehicle financing and even handle credit card applications on your behalf.

The big advantages of using a loan intermediary

The advantages of working in this way are fairly obvious:

   - You get a better deal on your financing because you aren’t limited to one bank.

   - You still have only one company to deal with.

   - It’s easier to get loans thanks to the bargaining power of your intermediary.

In most cases, you won’t even find that you pay more because you’re working through an intermediary. Just as insurance brokers are remunerated by insurance companies when they recruit clients, financial intermediaries usually get some form of compensation from the banks thy deal with. But unlike ordinary sales reps, their loyalty doesn’t lie with one company, so they can afford to offer you the best solution no matter where it comes from.

In fact, they have to come up with something better than you’d be able to get on your own – if they didn’t they’d end up with a risky client base that only uses them because there’s no other way they could get a loan.

Is your bank on a power trip?

Banks realise that most people will stick with the financial institution they usually use – even when they’re not getting the best package or have been putting up with lacklustre service. They think they’ve got a ‘captive market’.

But contrary to popular belief, you do have choices other than changing banks and getting the same old run-around form different people. Loan intermediaries know that they have to be service-orientated. They have to be better, faster and more cost-effective.

Wouldn’t it be nice if your bank were to try harder? But instead of putting up with an expensive, sub-standard service, you can move all your credit requirements to a loan intermediary instead. It’s quite possible that this will be the wave of the future as increasing numbers of people start looking differently at credit.

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