Browse Forums Home Finance 1 Mar 01, 2011 6:52 pm hi all, just want to ask what are the disadvantages of getting a loan from a small lender instead of the big banks? I'm really considering those small lenders because of the difference in interest rate and annual fees... thanks in advance... Re: disadvantage of getting a loan from small lender 2Mar 01, 2011 6:58 pm You need to look right into the fees and charges. Do they have establishment fees / valuation fees / account keeping fees / exit fees / early prepayment fees? How small are we talking? Private lender or just credit union / building socy? The other things to consider is do they also offer insurances / bank accounts / credit cards / redraw / fixed loans etc. Can you access a branch readily? Do they have internet / telephone banking and is there any fees associated? Some things are worth waiting for. Re: disadvantage of getting a loan from small lender 3Mar 01, 2011 7:36 pm im looking at mortgage house, CUA and other credit union... I have talked to someone yesterday from mortgage house and the rate is 7.14%, with offset account, no annual fees... though there is around 200 plus for the processing and ofcourse no credit card but it has internet banking, etc compared to other banks with 7.8% and with annual fees... Re: disadvantage of getting a loan from small lender 4Mar 01, 2011 7:40 pm We will be going with Mortgage House once we save enough for the deposit. I think they are better than the banks and worthwhile going through them. some of the offset accounts that banks offer aren't 100% offset like Mortgage House. For us it will work out better going through Mortgage House..... hope all works out for you as well! Re: disadvantage of getting a loan from small lender 5Mar 02, 2011 1:31 am Small banks tend not to offer: 1. Any other financial products- ie credit card, savings account, insurance. 2. No branch access 3. Higher exit cost and application fee on average Having said that they are a worthwhile consideration due to their lower cost. Your statement about he rate being 7.8% with annual fee for big banks is WRONG- 90% of borrowers who goes with the BIG bank DO NOT pay the "Standard rate"- it's normally around 7.2-7.4% with annual fee. Also 7.14% with MH is DEF not the lowest...if your going to go with a small player - you might as well go for the cheapest rate. Homeside ( backed BY NAB)- 6.9-7% Max. No annual fee and 100% offset. BMC- 6.88% with annual fee, 100 % offset, full feature and credit card Suncorp bank- 7.1% P.s Nothing wrong with MH, i heard some good stories about them- especially in term of customer service Regards Michael Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Re: disadvantage of getting a loan from small lender 6Mar 02, 2011 8:52 am We were very happy with our credit union - they do have savings accounts, credit/debit cards, re-draw facilities, line of credit accounts, off set accounts, insurance etc - we did not use all of the above but they do offer them. Also no annual fee or account keeping fees and by far lower cost application fee than any banks we looked into. They do have branches and also can use Reditellers at no cost - Reditellers are ATM's to which a combination of financial institutions belong so are readily available everywhere. Re: disadvantage of getting a loan from small lender 7Mar 02, 2011 8:56 am Helyn - sounds like a good bunch, who are they? Regards Michael Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Re: disadvantage of getting a loan from small lender 9Mar 02, 2011 9:41 am Awesome! always a bonus not having exit fee Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au How much are you ahead in payments compared to where the build is at? Have you fully drawn down the loan? 5 9143 The biggest challenge will be if you take out a loan and then run out of money - you'll have an incomplete security and lenders do not like this so you can get stuck.… 2 13460 Use a product like Equisol's Vitalise to clean the deck then coat with a penetrating timber oil. It will look 10 years younger and add value to your home. Visit for… 1 11214 |