In order to borrow money, clients first need to have cash to pay for the fees that come with loan applications. Yes, it sounds ludicrous. But for many lenders, especially traditional ones, this is a requirement.
What heightens the pain (and often confusion), is that for some creditors, the loan application fee and other bank loan fees are sometimes bundled – making it hard to distinguish one part from the other.
In applying for a business loan or short term finance, it’s ideal if the fees are relayed to the clients from the outset, logically.
Better yet, it’s good to find a loan that has a minimal (or non-existent) application fee. Here are the benefits you can get from doing this.
Lesser financial obligations for clients
While we understand that there are some fees that are necessary, like the valuation fee for a mortgage valuation, there are other charges that clients can do without. The booking fee, for example, is something most clients see little value in as the fee won’t be refunded if the loan is not approved. With a small or zero booking or application fee, this would mean clients will not have to provide money for a loan they’re not even sure they can get.
Easier for brokers to package the loan
Having no fees, or at least having a lesser amount to pay upfront for a loan application is a great selling point. It also eliminates the need for brokers to package into the loan. Best of all, with clear and well-defined loan application fees and bank loan fees, clients know where their money is going and what happens to it. Brokers can also gain the trust of clients as they are made fully aware of all the financial requirements that are expected of them and what happens if their loan gets approved or not.
Interim Finance is an industry leader when it comes to short-term loans. We offer short term caveat loans, short term 2nd mortgage and 1st mortgage to SMEs. Aside from our best-in-market rates and transparent loan fees, we offer full back-end support service to brokers. Learn more about our loan process here.