In the financial services market there is much talk about borrowing with advice and borrowing without advice. Borrowing money without advice is based on execution only. This means that you must find out for yourself which type of loan you want. And whether this form of borrowing money really suits you.
Why borrow without advice?
Borrowing money can be impactful. For example, a loan of € 20,000 with a monthly installment of € 200 will have a term of (without additional repayments) at least around 10 years. You therefore enter into a long-term obligation that you must meet for a long period. The consequences of not being able to meet the obligation can be large. Then why borrow money without advice? While advice on borrowing money alone is free?
Is advice about borrowing money really free?
A simple question, the most important thing is that it does not matter to credit brokers whether or not you take advice. The interest that you must pay is the same. So you can just as well take advice on the loan. We therefore recommend free advice on a loan that can also have an impact.
To further explain the above, we will give you some additional information. There are two groups active in the Netherlands for borrowing money. The banks/direct writers, who do business directly with the consumer. And the credit brokers, they mediate for various banks, and are a kind of intermediary, so they don’t provide you the loan yourself.
By the way, you can generally borrow through credit brokers at a lower interest rate than at the banks.
Credit brokers are rewarded on the basis of commission from the banks. Whether or not a credit broker gives advice, the remuneration for the broker is the same.
For mediating a loan, a credit intermediary may not legally charge any costs. You will receive advice regarding your loan without having to pay anything extra for it.
What are the costs charged for?
The above makes it clear that no costs may be charged for brokerage loans. However, costs may be charged for additional products.
In the advisory process, your financial position must be thoroughly reviewed for the risk assessment. The risks of disability, involuntary unemployment and death are also discussed. And therefore also your current insurance policies. If the inventory of your data shows that there is a risk in one of the aforementioned situations, or if you want insurance yourself, costs may be charged for mediating this insurance. The insurance itself is a net product. This means that the broker receives no commission for this from the insurance company. If this applies, these costs must be discussed with you in the interview, so that you know where you stand.