MoneyPlace has raised the bar on personal loans in Australia, setting a new market-leading $80,000 unsecured loan - and is inviting brokers to enter the personal loan marketplace to take advantage of their new offer.
Alf Vasta, Head of Broker Distribution, said that it was the broker channel that had compelled MoneyPlace to offer this new, market-leading product.
“It's just feedback from the broker market,” he said of their decision to set this new limit. “More and more clients are focussing on doing renovations and things like that, tidying up their property, and there's not enough equity in their home loans. We're really looking to help brokers to help them find a stop gap solution for their clients. As we don't have any exit penalties or monthly fees, we're really seeing it as a good opportunity.”
“I've ticked two years here at MoneyPlace, as Head of Broker Distribution, and my mantra has been positioning personal loans in the broker channel. We're starting to make some real headway on the back of it.”
“We do unsecured personal loans, and we've just launched $80,000 unsecured, which is the largest unsecured loan amount in the marketplace. It's market leading. That's pretty exciting for us. We launched last week, and it's just gone crazy. We're trying to target clients looking to do renovations, purchase assets and thinks like that using an unsecured personal loan.”
Vasta added that brokers should be excited about getting into the personal loan marketplace because it offers them several options that their traditional mortgage business can’t, as well as the potential to increase earnings.
“There's a couple of things that personal loans can do,” he said. “One, it helps brokers convert more of their core business. If you've got a client trying to lodge a residential home loan or an asset car loan and there's servicing issues, maybe a stage one debt consolidation can help. Instead of paying for a lender's mortgage insurance with a large premium over a 30-year term, you can provide that short term that keeps the Loan to Value Ratio at 80% and the client gets a better interest rate and doesn't have to pay the LMI premium. At any stage, the broker can engage with their client and look to consolidate that personal loan back into the home loan.”
“The other thing is that is gives the broker the opportunity to increase their market opportunities and generate new business. Brokers traditionally target that one area. Personal loans mean that brokers can target different market segments. An example would be solar panels: we fund a lot of clients wanting solar panels, or pools, and really it gives the broker not only the chance to pick up a new asset backed client, but also a new referral source.”
“When people are looking to do renovations, they're looking to do it quickly. We're funding a lot of pools, solar panels, renovations, furnishings and doing it as a stage one personal loan means that the client can get that money pretty quickly. Generally, we fund within three hours of a customer submitting an application and have funded some loans in a little as 30 minutes. This has been really important as we are often told by brokers that top-ups can take anywhere from 10-16 weeks for their clients to settle on their loans.”
“Probably the biggest thing that personal loans can offer the broker is more opportunity to engage more with their client. By way of doing stage one personal loans, it improves their borrowing capacity, so come stage two, whether that’s months or years, the client can consolidate back into the home loan, which gives the broker the opportunity to speak to their client regularly and have a true relationship with them.”
“And the most important thing in my opinion is that, by brokers offering personal loans, they ringfence their client base, because if their existing customers don't know that their broker offers personal loans, they'll go to another broker or the bank to get one and they'll look at taking over their client’s home loan. Ringfencing your existing client base is so important.”
“The benefits of personal loans help brokers write more business, engage with their clients more regularly and pick up new referrals, as well as ringfencing their own client base.”