Car Loan Broker v/s Lender

In the past, automobile buyers knocked the doors of car loan lenders only for their car financing needs. However, as time passed, car loan brokers came into the picture and changed the face of auto loan business to some extent. Independent brokers are licensed loan professionals, who work closely with multiple banks and non-banking finance companies operating in India. They hold the capacity to directly deal with financiers, on behalf of the interested borrowers, and can pass great discounts directly to their customers by dealing in high quantities of loan products.

Banks, on the other hand, cannot simply pass on wholesale rates to their customers due to high overhead costs. Moreover, brokers help in saving ample time that is otherwise spent on shopping for an ideal lender and dealing with the complex paperwork. Car loan brokers can deal with the documentation on behalf of their customers and make it possible to apply for a car loan in the comfort of pajamas while relaxing at home.

When discussing about car loan with a broker, borrowers are granted access to a plethora of options offered by a long list of banking and non-banking lenders. It is somewhat like visiting McDonalds and being able to order something from KFC, Dominos, or Pizza Hut. Isn’t that amazing! On the contrary, banks are the places intended to park the hard-earned money, while being able to withdraw, deposit and access some credit over a period of time. However, they limit the potential borrowers exclusively to their own products, without giving any hint about the interest rates or benefits offered by other car loan lenders.

Between all the mishmash, potential car loan borrowers often misconceive car loan brokers as lenders. However, the actual picture is totally different. Brokers serve as a bridge between the big financing houses and the prospective customers. They hold the necessary experience and expertise to offer advice on the related products, find the best deals that a perfect match to individual needs and wants of the customers, and handle the complex documentation with utmost ease. Moreover, one will never have to pay extra to the brokers for sourcing an automobile loan than what banks charge for the same product. Brokers might, on the flip side, help in securing ideal auto finance at discounted rates, thereby making it an economical option on the whole.

To sum up, one must consider going to authorized brokers for dealing with all the car loan needs. Ideally, it is a win-win situation for all the parties involved.

Customers get products of different lenders at one place, banks like working with brokers as they expand their customer base, and brokers are able to offer best deals to their customers after keeping their marginal share of income.