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Simple English definitions for legal terms
loan broker
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A quick definition of loan broker:
A loan broker is someone who helps people borrow money from a lender. They can help the borrower find a lender with a lower interest rate and save time. Sometimes, using a loan broker is better for business owners. However, loan brokers usually charge a fee, which can be as high as 17% of the loan amount or as low as 1% of the loan amount.
A more thorough explanation:
A loan broker, also known as a mortgage broker, is a person who acts as a middleman between a borrower and a lender. Instead of a borrower directly borrowing from a lender, a loan broker can help the borrower find a lender that meets their financial goals.
For example, if a business owner needs a loan to expand their business, they can use a loan broker to find a lender that offers lower interest rates and better terms. This can save the borrower time and money.
However, using a loan broker can come with a fee. The fee can be charged to the lender or the borrower and can range from 1% to 17% of the loan amount. For some small businesses or individual borrowers, it may be more reasonable to borrow directly from a lender.
Overall, a loan broker can be a helpful resource for borrowers who want to find the best loan options available to them.