A credit broker is usually used whenever a loan or loan is requested for a large amount. The credit intermediary then takes over both the negotiations with the respective lenders and the application for the loan itself.
How to find a good mediator
Credit intermediaries have numerous advantages. Through their close contact with banks and other lenders, which has usually been well maintained for years, they have the opportunity to obtain conditions that are not accessible to private individuals and people outside the industry.
While this process is not worthwhile for smaller and micro-loans due to the fee that a credit intermediary ultimately deducts either as a fixed amount or as a percentage of the loan amount, slightly improved conditions and somewhat lower interest rates can make a big difference if the loan amount changes five- to nine-digit range.
Here, people outside the industry often have the problem of not being able to obtain an individually tailored loan, even if they have the necessary creditworthiness for the amount requested. Credit intermediaries, on the other hand, oppose the industry, the lenders and the banks and know exactly what type of loan and credit which lender is suitable for. These advantages are ultimately converted into cash for the borrower if, for example, lower interest rates are incurred or if the loan agreement can be individually provided with some key points that would otherwise never be up for discussion when negotiating with people outside the industry.
Credit intermediaries with no upfront costs are reputable
A credit broker with no upfront costs conveys a high degree of seriousness, because potential borrowers, regardless of whether they are under private law or companies, should always ensure that the credit broker works at no upfront cost. Unfortunately, there are also some black sheep in the banking and banking sectors, who make their living mainly by paying upfront costs.
Inexperienced borrowers are ripped off by promising first-class conditions, while part of the costs incurred must be covered in advance. A good credit broker, on the other hand, only issues an invoice to the borrower if a suitable loan has also been found. Of course, it is not possible to generalize that every credit broker with a pre-cost option would be a “black sheep”, but caution is definitely advised with these credit brokers.
If in doubt, borrowers in the market should look around for possible alternatives, because credit intermediaries are usually not really rare. The prerequisite for this, however, is that hiring a credit broker with regard to the loan amount is worthwhile at all. Hardly a good credit broker will move out of his office for a micro loan, but with a company loan in the millions it looks very different. It is best to ask the broker’s core areas and specialization in advance.