What is the difference between a good broker and a bad broker?
How can you make sure that a personal loan offered by a broker doesn’t include any traps?
The dynamic loan market, coupled with the difficulties encountered by some individuals, unfortunately encourages certain disreputable brokers. We therefore strongly recommend performing a few checks before agreeing to the loan, to ensure that the broker is trustworthy and that the solutions offered are sound.
The points that require particular attention are:
- The copy of the agreement
- The administration fees
- The cancellation right
- Prepayment conditions
- Mandatory and optional insurance
- Working with an approved broker
The copy of the agreement
It is very important that the broker issues the customer a copy of the agreement. This is a mandatory document, an original copy of which must be in your possession, signed by all parties.
The administration fees
The financial institution from which the loan is taken out, pays the broker in the form of a portion of the profit. Therefore, the borrower should not pay administration fees when using a broker, as these fees are included in the interest rate. This is also one of the advantages of using a broker: the latter simplifies the legibility of the offers, which therefore become easier to compare.
The cancellation right
This is the consumer’s right to withdraw after having signed the agreement. This solution protects consumers that sign too quickly, without fully taking into consideration all of the consequences of their commitment, or who may have been somewhat pressured into signing.
Your agreement must stipulate the cancellation conditions and the consumer must be made aware of these. To date, the consumer’s cancellation right applies for 7 days following the signature of the agreement. However, from 2016 onwards, this period will be extended to 14 days.
We recommend that you systematically check that this cancellation right is present in the agreement.
Consumers often express the desire to pay off their loan before its maturity date. This transaction is possible, however is subject to fees equal to around one hundred Swiss Francs: this is known as prepayment. This point is governed by Article 17 of the Swiss Consumer Credit Law on prepayments, which came into force on 01 January 2003. A good broker must systematically provide you with information regarding the prepayment conditions.
The interest rate and repayment period
These are the basic features of a loan. This information must be clearly stipulated in the agreement. If in doubt or if this information appears ambiguous, don’t hesitate to contact a specialist to confirm the loan conditions.
Mandatory and optional insurance
These insurance policies cover certain risks, for example the death of the borrower. Only death insurance is mandatory and its costs must be included in the interest rate proposed.
Other insurance policies are therefore optional. Should you decide to not take out insurance, make sure that you can continue to pay your repayments in the event that the risk should materialise. For example, for unemployment insurance, check that you will still be able to repay your loan with a 30% drop in income.
Working with an approved broker
Approval is an excellent guarantee that the broker can be trusted. Good brokers are approved by the banks, however no list of approved brokers exists. Consequently, some ill-intentioned brokers wrongfully claim to be approved by a bank. This is quick and easy to check by a simple phone call to the bank in question! This will prevent you from falling foul of a disreputable broker.
The advantages of using a broker
The first advantage is undeniably the possibility of accessing the products of several banks at once, and therefore of being able to choose the solution the best suited to your needs. The broker can also quickly check that your profile corresponds to the preselected bank by confirming that you meet the bank’s criteria. This is a non-negligible time saver.
The role of a broker is obviously to obtain the most advantageous conditions, in particular with regard to the interest rate. Thanks to its network and the number of loans taken out, the broker has a significant amount of influence over banks, which is used to serve its customers.
In this case, the broker analyses your situation in detail and can offer well-suited solutions practically tailored to your needs, thanks it a wide catalogue of available products. It also assumes the administration fees, thus sparing you the many administrative procedures.
With CC Crédits Conseils SA
The customer can submit a loan application or debt consolidation application via the website, telephone or post. CC Crédits Conseils SA finances your personal projects from 5,000 to 250,000 CHF, starting at 6.9% and with a repayment period from 6 to 72 months. The procedure is simple: CC Crédits Conseils SA analyses your situation based on the documents provided, and gives you a response in under 24 hours. You can then receive the amount accorded within 7 days of signing the agreement.
Crédits Conseils SA is a serious brokerage company founded in 2003 that encourages a management system tailored to suit each customer. Through its position as number one on the brokerage market, its significant volume of business provides it with a solid foundation used to obtain bank interest rates from among the best on the market. CC Crédits Conseils SA therefore has excellent results in terms of the proportion of loan applications accepted, helping customers to obtain the most advantageous conditions possible.
- Categories: Consumer credit