Finance small or big jobs, pay your bills, pay yourself a well-deserved vacation, finance the purchase of a new car or household appliances … in a lifetime, we rarely miss the bank loan! But with borrowing conditions that vary widely from one establishment to another, it is often very difficult for the future borrower to find their way around.
A professional in the banking sector can, however, support him in his financing process and help him see more clearly: the payday loan broker.
What is the mission of the payday loan broker?
The payday loan broker is a banking and financial expert acting as an intermediary between an individual (borrower) and a financing organization (bank or credit organization). Some consumer credit brokers are generalists, others specialize in one type of credit, such as payday loans for example.
The main mission of a broker specializing in payday loans, like any credit broker, is to find the most advantageous loan conditions for his client (interest rate, duration of repayment of credit, etc.) given his profile. To do this, he will put the various players in his professional network into the competition.
The elements that the broker needs upstream are, among others:
- The desired amount;
- The project justifying its request for funding;
- His professional, family and financial situation;
- Its repayment capacity.
This file is sent by the broker to the funding organizations. It is used by them to study the case of the borrower and to draw up an offer which is adapted to it.
Note: improved borrowing conditions
A loan broker or payday loan repurchase will often offer a lower rate offer compared to a borrower who applies alone with the same institution. How? ‘Or’ What? Thanks to the regular relationships it maintains with funding institutions, but also to pre-negotiated agreements with them, in particular.
Where to find a payday loan broker and for what rate?
It is possible to find a payday loan broker both in physical agency and online. Some professionals are independent, others are part of a network of brokers.
Regarding rates, whether the borrower mandates an online broker or directly in an agency, the services provided will be free until the proposed financing offer is signed. However, once the offer is signed, the broker will receive a percentage, generally equivalent to 1% of the amount granted to the borrower’s personal project. If I mandate a broker, no need to prospect on my side, then?
In fact, it is preferable! The payday loan broker chosen by the borrower may be an expert in consumer credit and hold a wealth of contacts, but he will never be able to sift through all the offers. By taking the time to compare a maximum of them, you could find one on more advantageous terms.
Today, there are tools that greatly facilitate the task: online loan comparison or loan simulator or loan repayment. As the requests of a broker are, as we said, free, you take no risk. When sending you an offer, the broker will also give you time to think about it. No need to rush!
Is the rate the only variable I can focus on?
If the APR (annual effective annual rate) is an important factor, the borrower’s attention to the offer of a payday loan broker must be global. It must take into account all the variables surrounding the cost of a loan. This includes repayment tenure and insurance, among others.
The repayment tenure
The duration of repayment of a consumer credit directly affects the borrowing rate, and therefore the total amount of the loan: the longer it is, the higher the rate. In order not to distort the comparison, the borrower must make sure to parallel credit offers with an equivalent repayment duration.
In a loan offer, the amount of insurance can be heavy (up to 4% of the credit amount, or even more). Good news, however: as a borrower, you can use your right to delegate insurance, that is, your right to take out insurance in an establishment other than the one consenting to the loan. Clearly, if you find cheaper insurance, you can dissociate it from your consumer credit.