Australia’s relationship with credit has changed, and it’s having huge implications on the tools brokers keep to hand. Alf Vasta, the newly appointed head of broker for MoneyPlace, explains how prospective mortgage applicants can leverage the trend
It's likely that 2019 will go down as the year Australia broke its credit card habit. However, it’s also likely to go down as the year when borrowers learned how to leverage the personal loan. While credit card spending declined 3.9% in the year to April, personal lending experienced a 4.3% surge in April alone.
A number of bank and non-bank lenders have positioned to capitalise on the increased demand for this often-overlooked financial tool, among them MoneyPlace, which is experiencing annualised growth of 250%. With a new head of broker now on board, that figure is set to grow.
“When you think of a personal loan, you think about a new car or a holiday, but actually, we [fill] gaps in a broker’s business,” says Alf Vasta, head of broker for MoneyPlace.
We have solutions for pre-, mid- and post-mortgage where a personal loan can help a client. If you know a client is going to be purchasing a property over the next six to 12 months, debt consolidation is a massive trend.”
Vasta explains that a prospective mortgage applicant with multiple debts, for example, is much more likely to get the home loan of their choice if they consolidate their outgoings into one loan repayment. Once in the home, renovations can also be funded at a lower rate through a PL.
Launched five years ago and acquired by Liberty Group in February 2018, MoneyPlace offers unsecured loans of up to $45,000 over three, five or seven years. Comparison rates start from 7.65%, and funds can clear within 48 hours. For the 10 minutes spent completing an online application for their client, a broker can earn up to $975 per deal.
“I believe personal loans will really become mainstream for the broker’s armoury in the next 12 to 18 months” Alf Vasta, head of broker, MoneyPlace
People and processes
Vasta’s strategic appointment in May of this year will allow him to build on his previous role as an award-winning BDM with Liberty to create a team that will continue to drive MoneyPlace’s growth.
“My remit is to build a team, but before we build a team, we need to make sure that we have the processing done right,” he says.
While Vasta describes his move from BDM to broker head as a “no-brainer”, his transition was inspired by wider trends in the market, from the PL application process at a bank branch to the need for brokers to deliver more solutions to different areas of a client’s financial life.
“For me, it’s what has been happening in the market over the last couple of years. We have seen the landscape change, and I believe personal loans will really become mainstream for the broker’s armoury in the next 12 to 18 months,” he says.
In adding value for brokers and borrowers, the MoneyPlace philosophy is three-fold: there’s no footprint on the client’s file, loans are priced according to individual risk, and technology is at the forefront, along with the opportunity for the broker to get the client a better deal.
“By not offering PLs, you’re putting your existing client base at risk, and if somebody else offers that, they will be providing a holistic financial solution to that client, and then the mortgage is gone, too. So yes, earning an income is important, but you also need to protect your client book,” Vasta says.
“To do that, personal loans need to be in the toolkit, and we provide that gap finance to tie in with their mortgage.”