Over six months on from the creation of its head of broker role, a specialist lender has identified distinct trends taking shape within the broking space as increasing attention continues to be directed towards diversification.
MoneyPlace’s Alf Vasta explained, “Brokers need to offer more holistic support to their customers. While some brokers already offer this kind of support, some still have a way to go.”
“Offering extra services helps brokers provide the best solution for their customer’s individual needs, whether it’s funding a specific purchase or getting them through a difficult stage in their life.”
Providing a broader range of services, such as personal loans, not only benefits consumers but also leads to stronger and more resilient businesses for the brokers themselves.
“Throughout the year, there are dips and peaks for mortgage brokers, making it difficult to manage cashflow,” said Vasta.
“Conversely, people take personal loans out all year round, whether during the mortgage process or to fund a specific asset, debt consolidation, wedding, holiday, etc.”
“With the broker channel recording its highest ever share of the home loan market, more customers are connecting with brokers and gaining a firsthand understanding of how much they can help. As a result, the demand for brokers offering personal loans – as well as home loans – is continuing to grow.”
For full impact, it's crucial brokers not only make sure their customers know they offer personal loans, but that they communicate the many ways in which they can be put to use.
“Personal loans can be helpful as a tool for debt consolidation, including tax debt and credit card debt,” explained Vasta.
“By having term-based repayments, borrowers tend to pay off their debt sooner. It also helps customers with cashflow stress, and can open up a wider array of lenders in the future and may even lead to a better rate.
“Doing this provides more structure and helps consumers stay on the right track towards achieving home ownership,” he added.
Further, personal loans can be utilised to fill other funding gaps brokers have repeatedly mentioned to Vasta over the last few months.
“Recently, brokers have highlighted the challenges of securing a top-up loan for customers completing home renovations, particularly when property valuations come in short. Personal loans can help to secure the funding for a property facelift and, as the property value increases, the customer may later opt to consolidate the personal loan into the mortgage,” he explained.
“We can also provide gap finance for customers who are short when it comes to covering stamp duty and other costs associated with home purchases.
“MoneyPlace personal loans don’t have any exit penalties or monthly fees. And, with loan terms up to seven years, we understand that customers may want to pay out their loan earlier or even fund the balance into their mortgage.
“For brokers, this means they have multiple opportunities to service their customers throughout their journey and help them get ahead.”