Loans Guides

Loan broker - Why use one?

We explain what loan brokers do and how can they help you get a better loan deal (Updated 6/8/09).

Many loan brokers have moved from the high-street to online, but their main function is still to help you get the best loan deal.

In this guide we explain what a loan broker does and why you might choose to use one, as well as offering top tips on getting the best loan.

Alliance Leicester Unsecured Loan

Company	% Typical APR
	Borrow between £7,500 and £15,000 with Alliance & Leicester, 8.0% APR typical.

What is a loan broker?

A loan broker is an individual or company that helps you find a loan and matches you to a suitable deal.

In the past, loan brokers were most frequently found on the high street. You would visit their offices and they would help you find a loan to suit your personal circumstances.

However, as a result of the technological advances we have seen in the last decade, many loan brokers can now be found online, often in the form of comparison websites.

They offer the same service, simply in a more easily accessible format, allowing you to compare different loans from the comfort of your own home.

Why use a loan broker?

Using a loan broker can save you the time and hassle of searching through hundreds of deals from different loan companies.

A loan broker can quickly and easily assess your personal circumstances and identify the most suitable and cheapest loans for you.

Normally you will only have to fill in a single quote form and no credit checks will be made until you actually apply for a loan.

We have teamed with Beat That Quote to bring you a free, no obligation loan service. If you are looking for a loan, you can simply fill in the loan quote form, and its loan experts will call you to help you find the best deal available for your circumstances.

Top tips on getting the best loan

A good loan broker should talk you through the details of the loans you are comparing, but it’s always good to know what to watch out for.

Here are our top tips for comparing loans:

Look carefully at the APR - The annual percentage rate (APR) tells you how much a loan will cost you in interest per calendar year. This allows you to compare loans against each other more easily. Before you sign up for a loan, make sure you know exactly what rate you are being offered.
Beware payment holidays - Some lenders may offer to defer your repayments for a set period at the start of the loan. However, you will still be charged interest during this time and your future repayments will be larger to compensate. Your total amount repayable will be larger too, so avoid this if possible.
Check for early repayment charges – It’s a good idea to check the early repayment charges that different providers charge, before choosing your loan. And if you think you are likely to pay off your loan early, make sure you pick one that won’t penalise you.
Shop around for PPI - Payment protection insurance (PPI) is expensive and you need to check you don’t already have a policy that would cover your payments in the event of job loss, accident or injury. Even if you decide you need PPI, don’t buy this from your loan provider. Instead, shop around for the best price, and read the small print carefully.