Many people concern themselves with the term ‘broker’, and avoid a valuable service. In this blog, we discuss why this is the wrong thought process.
The verb ‘broker’ means, to arrange or negotiate an agreement. A broker coordinates transactions between a buyer and a seller. A broker is an independent, impartial party whose services are used substantially in several industries. Brokers may be an individual or organisation. The buyer relies on the broker’s industry knowledge and contacts, in order to find a deal that suits them, where otherwise they may struggle.
Brokers are used widely in the finance sector. Some examples of specific sectors where brokers are used heavily, and successfully are: mortgages, commercial lending, personal lending, pensions, investments, and more.
In order to offer financial advice and/ or a finance broker service, the individual or organisation must be licensed with the Financial Conduct Authority (FCA). Thus, giving help and giving advice falls within the strict guidelines set out by the FCA. You protect yourself, the consumer. The broker must regularly read FCA updates, and adhere to any new rule released. If you are presented with a finance broker that does not display an FCA license number on their website, then please, walk away.
Finance brokers, and in particular mortgage brokers is widely accepted to have evolved in America. One of the first mortgage brokers recorded was founded in New York, in 1893, called Sonnenblick-Goldman. Sonnenblick-Goldman began organising debt financing for complex real estate projects. They quickly recognised the need for personal mortgage help, for those turned down by banks, who did not know where else to turn.
Finance brokers continued to set up, and the service grew hugely in popularity with consumers. This was mainly due to the ease with which a consumer could find the right product, and right company for them. In the days before the internet, it was even harder to find a mortgage, a loan etc. Even today, it can be a minefield searching through so many websites.
By the 1980s, finance brokering was heavily regulated. The Office of Fair Trading was responsible for licensing and regulating finance brokers from 1973 to 2014. This helped provide the broker with assistance on how to act in the interests of the consumer. It therefore gave a certain level of protection to the consumer.
In mid-2014, the UK government had a restructuring, as new financial products came to market, and grew in popularity. Regulation of consumer credit providers/ brokers now was the responsibility of the afore-mentioned FCA. This swiftly brought about more stringent rules for the broker, in an attempt to oust potentially non-compliant brokers from the marketplace.
Many of us think that we don’t want to deal with a broker when searching for a short term loan. This is largely because before the advent of the FCA, there were a handful of unscrupulous brokers who charged a fee, and didn’t provide a service to match the fee. This somewhat tarnished the term ‘broker’ in the short term loan sector, and understandably so. Fortunately, the FCA’s approach to consumer credit brokers has massively helped to ‘clean up’ the industry. They forced these organisations to cease trading.
It is, of course, feasible, and perfectly justifiable for a short term loan broker to charge a fee to the consumer, but please check exactly what service you will receive first. At Moolr, we do not, and will never charge fees for our short term loan broker service. Our remuneration comes direct from the lenders, as we are helping them to lend to consumers, and therefore it is quite right that they pay for the service, and not you, the consumer. It is important to note that our fee from the lenders in no way affects the APR, or overall cost of your loan. To the lender, it is simply akin to a marketing cost.
Moolr’s online short term loan broker service means that by completing just one, quick, no obligation loan application, we can send this to over 40 lenders on your behalf. As our system moves through our list of lenders, we receive a quick response from each. If lender 1 responds with a ‘no’, our system swiftly moves on to lender 2, and so on until we receive an accepted response. At this point, we will obtain the URL (the ‘www.’ address you see in your browser) with your personalised loan offer from the lender. Our system will then redirect your browser away from our own website, to the lender’s offer.
Land on your potential lender’s website, and with your personalised offer, you cease a relationship with us (we have done our ‘broker’ job!). You then have the ability to fully read the lender’s general terms and conditions, along with the terms of the loan (pay particular attention to the offered APR, and total cost of borrowing). If you aren’t happy with something, simply walk away. Should you want to come back to Moolr.co.uk, then you are more than welcome to try again, as we will find an alternative lender for you. If not, then we’re sorry we couldn’t find a suitable short term loan offer for you on this occasion. We did our best, and you have lost nothing other than a couple of minutes! Research what is best for you before committing to a deal. Look at our advice sections and learn more about potential borrowing.
If you are happy with your loan offer from the lender’s website, then simply confirm your application on their website! You will then receive a text and/ or email explaining the next steps, and when you are likely to receive your funds. Often, funds arrive within an hour, but sometimes this can take 2-3 days, depending on the lender, and their internal processes.
It is understandable that the term ‘broker’ is sometimes approached with trepidation. This is due to historical abuses of power of small few organisations. However, the FCA has done a tremendous job in preventing this from happening. It is our view that any short term loan broker charging a fee to the consumer must have an extremely good reason to. We feel that our approach to short term loan brokering is right. This is because the consumer is never charged a fee, but the lender is – at no detriment to the consumer.
Moolr’s short term loan broker system is, and always will be free to use. We feel that it provides a quick and easy method for finding a short term loan. Applying means you are under no obligation to commit. If you are not happy with the loan offer we find you, simply walk away. We are confident you will be happy though!
We wish you all the very best of luck in your searching, and hope to see you soon!