Loan application- have u done this??

Question

Have any of u ever applied for a loan and get back a letter saying ur application has been approved- and that u need to send a brokers fee of £49 to process it??- Is this a con where they get your £50 and then dont give you a loan??? (UK)

I havent applied to the banks cos i have a really bad credit rating so i know i wont get one- I am a tenant aswell so no security.

Answer 1

i know lots of people that have paid brokers fee's and got the loan. The brokers usually refer you to a company called Welcome finance, or London Scottish. My friend paid the brokers fee and asked for £5000 and got £2000, so i rang the company directly( welcome finance) and applied for a loan of £5000 and got £2000 without paying the brokers fee.
The brokers are just the middle person, but the yellow pages or 192.com can be your middle person-cos thats all the broker does-give you the number

Answer 2

I would suggest that you go and see them in person, and view the conditions of approval, but don't be signing anything until you see the credibiltity that the office offers...
I have worked for banks & non conforming lenders....
The banks will generally make you payout any other defaults that are present on your credit file, however they have the right considering that you have no security to raise the rate, considering that in their eyes you may be a risk. Just a way they can recover any funds if they had to support a loss.
Alot of brokers get paid commissions from the bank/lender however a application fee is payable upfront or they can build it into the loan.
If a broker is asking you for $50 is propably because they have are secured a fantastic rate, which is cheaper over the term of the loan in comparison to the commission or broker fee paid.
The bottom line is sweet The banks have bigger overheads and have to pay all staff on a minimum wage & pay their staff commissions too.

Answer 3

Apply direct to a loan company that way you cut out the broker. Most brokers get a commission from the loan company for selling you the loan in the first place so I wouldn't ever pay a broker a fee.

Answer 4

Brokers charge an admin fee as they act as clearing houses for the finance companies. This is the only fee they receive and once they have received your fee they will send you details of the loan company and a reference number to show you have been provisionally approved.
You should never have to pay an upfront fee for secured loans.

Answer 5

Some loan companies do do this, it is just a way of them covering their overheads. If you take the loan but dont actually draw down the money (take the money out of the account) they have tied up the money but you wont be paying for it.

As loans less than £25,000 are regulated you are protected by the consumer credit act in the event that the company you are dealing with is less than scrupulous

Answer 6

Having a bad credit rating leaves you open to all sorts of dubious deals from companies willing to take the risk and lend but this is a new one on me! Normally they'll just hit you with really high interest rates. I'd be very wary indeed!

Answer 7

Abbey national prolly have the best rates around at the mo... 5.8%. Apply on their website. I did and got approved... although I didn't actually need the loan after that!

Answer 8

yep definetly a con u r better going to a bank or another reputable loan company, whatever u do DONT send that money

Answer 9

It may NOT be a con but I got one from the Nationwide and didn't have to pay a fee

Answer 10

it does sound a bit strange ,maybe you should think again and apply elsewhere like banks and well known companies direct .
try looking around .