Different fees may arise when lending, which are often referred to as fees. Many banks charge processing fees when paying out loans, which they have to include in the effective interest rate.
If the borrowing takes place through an intermediary, he will charge an agency fee. Irrespective of the loan approval or fees already paid when submitting the loan application are not permitted. These are also known as preliminary costs and are expressly prohibited by law.
What are the advantages of the loan without processing fees?
With regard to the processing fee charged by the lender, it is fundamentally irrelevant whether he lists them separately as processing fees or pays the loan without fees and has already included the costs incurred in the nominal interest. In both cases there is an identical effective annual interest rate, which is decisive when comparing loans. However, a difference is noticeable for the customer if he repays the loan prematurely.
In this case, the bank does not reimburse the separately stated processing fees, so that the effective loan interest rate increases retrospectively. Thus, the savings from early loan repayment increase if the customer received his loan without fees for the loan payment. This is most noticeable in the event of a revocation of the loan application within the statutory revocation period, since in this case several financial institutions exclude the reimbursement of the processing fee in their terms and conditions. Such a general exclusion is not legally binding, but only a few applicants dare to legally deal with a bank.
Loan without agency fees
In any case, bank customers receive their loan without any fees for arranging the loan if they submit their loan application directly to a bank. In many cases, however, commissioning a brokerage makes sense, since thanks to its bundled buying power, this can often result in lending to customers who are refused direct bank applications.
Some products such as Credit Bureau-free loans over $ 3500 are hardly available without a loan broker anyway. Naturally, the credit agency cannot work free of charge and can only provide a loan without fees to the borrower if it receives a commission from the bank. In any case, applicants make sure that they only have to pay fees if the loan is successfully brokered.