A credit broker connects a consumer or business looking for a line of credit with a company that can provide one, such as a bank or another lending institution. Credit brokers handle all types of credit, including business loans, mortgages, automobile loans, and personal consumer credit. In competitive financial markets, a broker acts as an intermediary between banks and individuals or businesses, qualifying loans with the most appropriate lending institution.
A broker’s job entails a mix of sales and marketing, with the broker’s goal being to find clients in need of loans and then qualify them through the application process. A credit broker may assist a client with all aspects of the loan process, including the application paperwork and fee and interest rate negotiations. The direct role of a broker can differ region, as some countries, such as the United Kingdom, have specific regulations governing what a broker can and cannot do. As a result, a broker in some areas acts more as a client advocate during the loan approval process rather than directly selling the loan.
To find the best lender and navigate the technical aspects of the loan application process, most people and businesses choose to work with a credit broker. A credit broker is compensated for this receiving a commission, which is usually a percentage of the loan amount and type. This fee structure is regulated in some but not all regions, and it is generally agreed upon at the start of the loan process. Brokers can help consumers and businesses find loans because they have connections with lenders and access to wholesale credit markets, allowing them to find the most competitive lending rates. A credit broker differs from a loan officer in that the broker is a third-party who is not directly employed the bank or lending institution that is offering the loan.
Working as a credit broker typically necessitates a bachelor’s degree in a field such as finance, economics, or business. A master’s degree is also required some employers. The work is done in an office setting, but it may require frequent travel to meet with clients and interact with lenders. Extra hours are common, depending on workload and circumstance, though a typical 40-hour work week may be observed.