Do Brokers Charge Fees?

Do brokers charge fees?

If you’re new to car loans you might be curious about how things work. You'll likely have questions like ‘do brokers charge fees’ or you simply want to understand what a brokerage fee is.

Positive Lending Solutions have a team of expert brokers who can help you to find the best car loan for you. With decades of experience and access to a wide range of lenders, our brokers aim to save you money on your car loan wherever possible.

Speak to Positive Lending Solutions and see why our car loan services are unmatched.

Car loan brokers in Australia

To understand loan brokerage fees, you’ll need to be clear on what car loan brokers actually do.

When you’re looking for a car loan, you can either go:

• To a lender directly
• Use a loan broker

Going to a lender directly means you’ll be offered loans carried by one specific lender only. This could mean that your options are limited and you may not get the best value for money.

A car loan broker will search various lenders on your behalf to help you get the best car loan for you. They’ll approach lenders with the terms that you have given them, aiming to get the right deal for you.

Car loan brokers should provide you with a number of different services and it’s also useful to remember that by using a car loan broker, the applications and enquiries made won’t be recorded on your credit file.

Paying a loan broker fee

Generally, you won’t pay a fee upfront to your car loan broker. With Positive Lending Solutions, a broker fee is included within your loan application and this is very normal practice within Australia.

Any loan brokers must be licensed and operate independently of banks and other lenders. The loan broker fee will generally be paid by either you or the lender, and usually equates to a small percentage of the loan amount (roughly 1-2% is to be expected)

There are a few exceptions when people may have to pay a broker a specific fee directly however these are usually restricted to:

• Commercial or business loans
• Loans that are paid off or refinanced within 2 years
• People in a complex situation

What to expect from Positive Lending Solutions

We often get asked ‘do brokers charge fees’, and the simple answer is yes. It’s important to remember though that we’ll be doing everything we can to negotiate the best car loan possible on your behalf and the amount we’re paid will be a percentage of your total loan amount.

Don’t be concerned if we ask a lot of questions. In recent years, lending in Australia has become much stricter to ensure the industry is as ethical and regulated as possible. This means that we often need to have extensive details for your car loan application – meaning we work even harder to earn our loan broker fee.

As any loan broker should, we’ll always disclose any loan broker fees upfront and will only ever charge the agreed amount.

Red flags to avoid

• You want to make sure that you’re getting the full story – if there’s anything at all which you feel your lender isn’t fully explaining to you, or large loan broker fees that crop up which you weren’t told about, you should step away.
• It’s important to get everything you want from your loan clear with your broker at the beginning. This will help when it comes to comparing options – each one should clearly compare the same factors such as loan terms, deposits, fees and residual values.
• Always ask your broker about the total amount financed. This amount includes the price of the car, total fees, insurances, warranties and any other extra fees that a broker could have included in the total. Make sure that you are happy with all the components.

Honesty is the best policy

Remember that feeling as though your loan broker is being transparent is one of the most important things. As long as you’re getting the full story about loan broker fees, you can make an informed decision.

Be wary of a loan broker who tells you they aren’t getting any type of fee for their work – it’s highly unlikely they’re happy to work for free.

When thinking about ‘do brokers charge fees’, it’s more helpful to understand how they charge fees and once you know this you can proceed with the car loan process with full trust in the right car loan broker for you. Contact Positive Lending Solutions on 1300 722 210 today, so our loan brokers can help you get the right car loan option for you.