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How can I find a loan without paying an upfront broker fee?

Written by Mark Bower

Posted on September 2, 2012

Upfront broker fees are fees which intermediaries sometimes demand from customers before finding a suitable loan for the customer. They say that once they receive the fee, they will start hunting down a loan based on your needs – and charge around £50 for the service, although on some occasions this can reach in excess of £80.

Usually, if you pay extra money you expect to get a better service and in many cases some people pay an up front broker fee thinking that it will guarantee them getting the loan they want. However, this is not the case. Brokers that charge an upfront fee do not have exclusive access to certain loans from lenders and they cannot guarantee that a lender will accept the customer’s application if they have paid a fee. On the contrary, fee charging brokers submit applications to lenders in exactly the same way that a non-fee charging broker would and lenders accept or decline these applications based on the same lending criteria for all applicants, regardless of whether a fee has been paid to the broker.

In addition, some brokers who request upfront fees may actually be less inclined to try and find their customers an appropriate loan quickly, because after having collected the upfront fee they want the customer to think that they are searching the market for a product - rather than sending the application directly to a lender.

If you are low on funds - which you probably are if you are considering taking out a bad credit loan - the absolute last thing you want to be doing is shelling out money on unnecessary fees.

So, how do you go about finding loans without upfront fees?

Many specialist lenders which are based online understand that customers looking for a loan do not want to spend any extra money finding a loan. If you apply directly to the Lender, and not through a broker, you will not be charged an upfront for your application for a loan. You will not need to pay anything to be considered for a loan, however if you are successful in your application, some lenders may charge an administration fee as part of your loan for setting it up.

Not only do these specialist lenders spare you from any extra cost to apply for a loan, but they also offer a quick and easy-to-follow service. Personal loan advisors are often available on the phone or through a local branch, allowing you to speak face-to-face with someone who can help you find the loan that suits you best. Furthermore, the online application forms are simple and therefore quick to fill in. In this way, online lenders who do not charge upfront application fees for loans save you time as well as money.