The media has been known to tell consumers to shop around for the best finance deal. They say to not depend on your main lender to give you the best deal. Make enquiries. Gather information. Become informed.
Sure, we agree you should be trying to find the best deal for your finance – whether it be for property finance, motor vehicle finance, equipment finance etc. However, what does a better deal really mean (and it isn’t just the lowest interest rate)? Will shopping around actually reduce your chances of securing finance?
Going from lender to lender may seem great if you have the time. It lets you know all of your options and hopefully helps you understand the finance process more. However, by doing this, some lenders will do a credit check and this then gets listed on your credit file.
Many people don’t realise that their credit file can make or break a finance application. Most people know that unpaid accounts (especially from telecommunication companies) can be listed on their credit file. However not many know that when you shop around, this is sometimes also listed on the credit file.
As soon as a lender sees a recent credit checks on your file (they class the last 2 years as recent in many cases) they immediately think the lenders have rejected your applications so a red flag goes up. Yes, we know you didn’t get rejected but the lender doesn’t know that. Doesn’t go down well at all. The more you shop around, the more credit checks are listed and the less chance you have of getting finance.
So, what alternative do you have? Obviously you want to get the best deal available and not just rely on one or two lenders. Well, your best option is to use a mortgage or finance broker. A mortgage or finance broker has access to many different lenders so can do the research for you before putting in a formal enquiry or application so no unnecessary blemishes on your credit file.
Sadly, the media has been giving mortgage and finance brokers a bad rap. The broking industry has had to go through major changes lately and ASIC is checking all brokers do the right thing.
So, how do you know your broker is doing the best by you? At Capital Funding Group we want to make sure we have happy clients who we can continue to have a business relationship with over the years. So, we spend time with you thoroughly discussing your needs and then finding the best lender just for you. A strong client relationship wouldn’t happen if we set the client up with an inappropriate lender and/or finance agreement.
So, don’t shop around and miss out all together. Contact us and we will help you.
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