What to Consider When Contacting Credit Intermediaries?

There are a lot of credit intermediaries in the USA, this is due to an increase in the debt load of the population and a drop in real income. But what to consider when contacting credit intermediaries? This is the key question.

Among the intermediaries, there are completely legal brokers and “black” intermediaries who openly violate the law. Making the right choice is not as easy as it sounds.

Indeed, you can apply for a loan directly at the bank, it is enough to contact the department or use the application form in the Internet bank (for those who are already a bank client).

Reasons Why it is Difficult to Find a Loan

Today, there are several reasons why it is difficult to find a loan:

• Problems with credit history. It may not exist at all (if a person has not received loans before), or it may be spoiled. Spoiling your credit history is easy, just take one microloan and skip payments.
• Low solvency of the borrower. Here banks usually include low income or informal employment of the borrower. The thing is that the bank evaluates each borrower by comparing its income and payments for the requested loan. If it turns out that a person will give 70% of his salary for a loan, no one will give him a loan;
• Borrower age. Everything is simple here – banks establish requirements for the minimum and maximum age of the borrower. Moreover, the maximum age is calculated exactly at the end of the loan term;
• Inaccurate data in the application. The bank checks some information from the loan application. In particular, she can call to work and ask if such a person really works for them. If the answer does not match the data in the questionnaire, the loan will be denied;
• Other reasons – malfunctions in the scoring system of the bank (automatic assessment of the borrower’s creditworthiness), suspicious documents, strange behavior of the borrower, etc.

If a person really needs a loan, but banks refuse, then it is easiest to contact a microfinance company. But interest rates on microloans usually exceed 300% per annum, and the maximum loan amounts are small.

How do they help? If they work legally, they have agreements with different banks and submit an application from one client to several credit institutions at once.

There may be more illegal schemes – the issuance of “certificates” of salary, the substitution of information about the borrower, lending to nominees. All this is illegal and involves criminal liability.

What unites legal and illegal credit intermediaries is that their services are not free. Usually, they receive income as a percentage of the loan received by the client.

How Legal Credit Intermediaries Work?

Legally working intermediaries can be loan agents or loan brokers. The difference between them is fundamental:

• A loan agent works under an agreement with one bank and offers its services;
• A loan broker works on its own and offers customers the most profitable options among several banks.

Another thing is a credit broker. If anyone wants to pay through the USAA routing Number The essence of his activity is to select the most optimal loan option for a client. Taking into account which clients most often turn to them, the broker’s job is to find at least one bank that will issue a loan to this client.

The loan broker work scheme includes several stages :

1. First, the broker advises the client and captures all the necessary data. If necessary, indicates which documents should be collected;
2. Selects suitable offers from different banks;
3. Helps the client to choose the best option from the offered;
4. Advises in the process of obtaining a loan and accompanies the contract.

In today’s world, a credit broker can easily replace the Internet. It has become quite easy to compare loan offers from different banks, you can immediately file a preliminary loan application.

But not everyone can use the Internet. These are older people, and those who do not have time for this. In addition, a loan broker can help with other issues:

• Suggest options for refinancing a problem loan;
• Show how you can correct your credit history;
• Help get a loan without additional services (like unnecessary insurance).

This is all the work of a conscientious loan broker.

Unfortunately, in reality, there are few. The fact is that the broker works for a percentage of the loan issued, so it is in his interest to make the client receive the money. The loan terms in this case may recede into the background.

This does not mean that brokers cannot be used categorically. If banks refuse a loan, then contacting a broker can sometimes help to get it.

 

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What Nuances to Consider When Choosing a Broker?

Here’s the list of several things to consider when choosing a broker:

• The broker must have an office for meetings with clients, and he must also be registered as an individual entrepreneur or legal entity. This reduces the risk of fraud;
• In addition to state registration, it is advisable that the broker be a member of some industry association and have the appropriate certificates. They are usually placed in an office in a conspicuous place;
• A broker can only work with legal methods. If you were offered to “fill out” a certificate of salary on the spot, you should not have affairs with this intermediary;
• No broker can guarantee a 100% loan;
• Bonafide intermediaries charge for their services only upon receipt of a loan;
• It is advisable to check reviews on the Internet, and on third-party sites and on social networks.

Signs of Illegal Intermediaries

The so-called “black” loan brokers also assist in obtaining a loan but do so in some illegal ways.

The arsenal of their working methods is quite wide:

• falsification of salary certificates and other documents confirming the status of the borrower for the bank;
• approval of the loan application by “your” employee in the bank;
• issuing a loan to dummies and fake passports, etc.

These methods are illegal and prosecuted according to the Criminal Code of the American Federation. For example, for providing a fake income statement against a borrower, a criminal case may be instituted on charges of forging documents.

In addition to frankly illegal operations, “black” brokers may offer fraudulent services, for example:

• “Correct” credit history. This is impossible in principle – the credit history is maintained by the BCI and depends on the loans received by the person and the timeliness of payments on them;
• offers options for which a 100% positive answer will come. This also cannot be, because banks consider all borrowers individually;
• offers a loan not from a bank, but from another person or company. In this case, the rate will be much higher than at the bank.

If you want to know how to distinguish a “black” broker from a “white” one, there are several signs of an illegal intermediary:

• Enticing advertising – on the street, in leaflets, on the Internet;
• The intermediary asks for payment in advance. Conscientious brokers work only according to the result;
• The broker suspiciously has a lot of positive reviews on the Internet. This may indicate purchased reviews and a desire to improve reputation;
• Intermediary offers to break the law for a loan. This clearly indicates a “black” broker.

The difference between “black” and “white” is the cost of services. Instead of 2,5-10% of the loan amount, the “black” broker can request up to 50-70% of the loan amount.

Undoubtedly, the worse the credit history of the borrower, the greater the percentage of “commission”.

How to Do It Without the Help of Intermediaries?

The best option is to contact the bank to get a loan. As practice shows, if you approach this process correctly, the probability of failure is significantly reduced.

To reduce the risk of refusing a loan, you need to prepare:

1. Check your credit history. Since 2019, it’s free, you can find it on the website of the credit bureau.
   On the Gosuslug portal you can find out which data center is in which data, and then make a request on the websites of these data centers for free. The received report will indicate all loans and credit cards, delays in payments, as well as the total credit score.
2. Check possible debts – for car fines, utilities, other obligations (for example, alimony). The State Services portal and the FSSP website will help here.
3. Collect information on loan offers from different banks and compare offers. It is available on special sites, but you can assemble everything yourself.
   Lending conditions are published on the banks’ websites, and the full cost of the loan (CPM) is also indicated – this is the final payment for the loan.

Before you leave a request for a loan in the selected bank, you can read reviews on the Internet. Often other clients share their experience – how easy it is to get a loan, are there any special conditions in the contract, which are worth paying attention to.

One can make a preliminary loan application through the Internet bank or directly on the bank’s website. If a positive answer is given in advance, then you should collect all the documents and go to the department.