Loan matching services or loan brokers can be fully automated or feature an agency with people trying to help you find the best loan for your current needs. They act as go-betweens for you and potential lenders. Loan brokers will save you a lot of effort, time, and most importantly, money. You can look at them as you would at a travel agent, negotiating a travel deal on your behalf. Good examples include services like Zippyloan and NetLoanExpress.
Here, we’ll explore some benefits and potential pitfalls of using loan matching services to identify the best lender for you.
How Loan Matching Services Work
The entire procedure is quite simple and it includes the following steps:
- After deciding on a specific broker, you’ll provide the company with relevant information by filling out an application form. It includes sections regarding how much money you are looking to borrow, your employment information, monthly income, and so on.
- The loan broker will compare your requests against its lender database in order to find the most suitable one. Don’t be surprised if the matching service finds hundreds of lenders ready to lend you the money.
- The service will contact you and share the final list of potential lenders. You can then easily compare interest rates and requirements across a big number of different candidates.
- Lastly, you choose the lender to fund you, usually helped by the guidelines from the brokerage service itself.
The Benefits Of Loan Matching Services
Using established loan brokerage services like LendingClub or Cash Advance has many benefits for the borrower. The most important ones include:
- A wider choice of lenders – As we already said, loan brokers have hundreds of lenders in their databases, waiting to give you cash for interest. Lenders will often compete to provide better rates than the competition. You can always deny certain services and there will still be a ton of other lenders waiting for you.
- One application for numerous lenders – Matching services allow you to choose between hundreds with a single click, which can save you an enormous amount of time.
- Bad credit is irrelevant – The loan approval process doesn’t depend solely on your credit score, believe it or not. We’re not dealing with banks here. Different lenders have different criteria and they’ll all be competing against each other, which means they can’t go sky-high with rates even if your credit is poor.
The Downsides Of Loan Matching Services
Compared to the pros, the shortcomings of loan brokers are next to nothing, but we still feel the need to provide you with the whole picture. They include:
- Spamming – Different companies will shower you with emails, messages, and calls, trying to be the ones you’ll pick in the end.
- Initial uncertainty – With brokers, you can never be sure who will give you a loan offer at the end of the day. Moreover, you can only compare data after receiving all the offers.