Lending advisers vs DIY loans: Can you protect your wealth?

The world of lending is vast and, at times, feels confusing. With countless loan products available, it can be hard to fathom exactly what deal works out the cheapest for you – and even harder to understand which will suit you best in the long term.

Whether funding a home or investment or refinancing to consolidate debt, working with a certified lending adviser not only helps to speed the process up and save you money. They will also see that the loan fits into the wider scheme of your financial outlook.

For personalised credit advice that respects your complete financial plan, contact us.

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What is a lending adviser?

A lending adviser, otherwise known as a credit adviser or finance broker, is a qualified and licensed consultant who will work with you to find the best loan structure to suit your specific situation. While best known for home loans, many lending advisers are also equipped to help you with commercial, investment, vehicle and equipment finance as well.

Licensed advisers must hold at least a Certificate IV in Finance and Mortgage Broking and are held to strict industry standards to ensure the client’s best interests are respected.

adviser_inline_1 — Finding a loan all by yourself can be frustrating and confusing.

Should you work with a lending adviser or DIY your loan?

When looking for finance, particularly for the first time, there’s a lot to consider. Many aren’t confident in finding the right finance by themselves, so lending advisers tend to be the popular option. The Mortgage and Finance Association of Australia estimates that last quarter, 60% of home loans were made through a broker.

Let’s take a look at why you should use a lending adviser, and how the process compares to DIY loans.

Benefits of working with a lending adviser

Save time and money

Researching the right loan for you takes a lot of time and understanding of industry jargon. You’ll need to go from bank to bank to specialist lender, looking into every product on the market if you want options. Otherwise, going directly to your current bank may mean you miss out on a better deal.

One of the key benefits of working with a lending adviser is a large catalogue of loans they have available. Advisers work with a large number of lenders, including the Big Four banks, secondary institutions and specialist lenders in order find a solution that’s tailored to your financial situation now and in the future. This can often equate into direct financial savings, as well as reducing stress and worry on your end.

adviser_inline_2 — With a team of professionals on your side, you can ensure your sights are set on a brighter financial future.

Include your financial planner

While most financial planners are not necessarily qualified to provide advice on specific loan products, your planner will have an intimate understanding of your financial situation and how the loan may affect it. Lending advisers are typically very happy to work alongside a financial planner, as their individual skillsets can ensure that a loan will help you accumulate and protect your wealth in the long-term. Working together, a financial planner and lending adviser can help you:

Avoid pitfalls, penalties and restrictions when borrowing.
Find a variety of suitable loan products to choose from.
Structure your debt and investments to see the best returns.

With both professionals on your side, you can access finance with an extremely qualified team behind you. When going it alone however, you may have little professional support as individual lenders may be more interested in selling their products or managing their own risk than reaching a solution for you.

The current political climate

There has been a debate in the media throughout the start of 2019 about the concept of using a mortgage broker or lending adviser after the Royal Commission into Banking referenced the way brokers are paid. Hayne’s view is that there needs to be more done to ensure brokers act in their clients’ best interest. We 100% agree that all brokers should act in their clients’ best interests.

It has been reported that the Productivity Commission and the governor of the Reserve Bank believe the risk of implementing a user pays models is a reduction in competition in the banking sector. One of the winners in the current model tends to be smaller lenders. As lending advisers, we are across the offers of many lenders; big and small alike. This means that if a smaller lender has a better package, they are likely to be considered where the average consumer may not have thought to look into that. Canstar Group Executive reports that “it’s the little guys that tend to be the price leaders”.

Taking on debt can feel uncertain and full of frustrating processes. With a lending adviser working alongside your financial planner, you can rest assured your future is being looked after.

Reach out to Invest Blue today for personalised credit advice that respects your complete financial plan.

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What you need to know

This information is provided by Invest Blue Pty Ltd (ABN 91 100 874 744). The information contained in this article is of general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regards to those matters and seek personal financial, tax and/or legal advice prior to acting on this information. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relations to products and services provided to you.