There are now more options than ever before to get a loan. Whether you are looking for a loan for a big life event such as funding your university education or renovating your first home, or even just a small personal loan for day-to-day expenses, finding the right loan for you can be a daunting process given the plethora of providers available on the market these days.
This article will analyse the value of loan brokers and how they compare to banks when it comes to getting a loan so that you have a better idea of your options before you go out loan shopping.
What Is A Loan Broker?
A loan broker acts as an intermediary between a lender and a borrower. Banks and other financial institutions can directly provide loans to borrowers.
However, as the lending space has become more saturated, loan brokers have become more popular. They essentially provide a service where they matchmake borrowers with lenders whose interest rates and repayment requirements best fit their needs.
Loan brokers do not lend out their own funds. They present the borrower with various options from different partnered lenders to help the borrower make an informed decision. The loan broker then earns a service fee when a borrower takes a loan through their platform.
An example of a notable loan broker in Singapore is Lendela. Established in 2018, it aimed to make getting a loan as seamless as possible for borrowers by incorporating Nordic-inspired user experience and financial technology to help Singaporeans better compare loans across different banks and financial institutions before applying for the be...