Housing credit intermediaries - What are they and why use these services?

What are credit intermediaries?

Credit intermediaries are individuals or companies that are part of the credit granting process, acting as a bridge between the consumer and the banking institutions that provide the credit. These intermediaries may present credit proposals, help consumers in preparing and organizing the necessary documentation for a credit application, sign credit contracts on behalf of banking institutions, or provide assistance and consultancy to consumers making recommendations. Attention! Credit intermediaries do not grant credit. Even when they are involved in the mediation process of a credit, the decision to grant credit belongs solely and exclusively to the bank (or credit institution) that grants it. These intermediaries also cannot market other banking products and services such as, for example, account openings or fixed-term deposits.

What are the advantages of using the services of a credit intermediary?

A credit application is a process that can be lengthy and requires patience, time, and availability. It becomes even more stressful when big life decisions, such as buying a home, starting a business, or fulfilling a personal dream, depend on its approval.

This is where a credit intermediary can be an asset. Let's see what advantages there are for you in using these services:

• Credit request preparation: A credit intermediary knows exactly what documents need to be presented for a credit request and how to easily obtain them, being able to guide and assist you in this collection and organization.
• Save time: In order to obtain a credit that benefits you financially, it is not enough to contact your usual bank. It generally involves contacting several banking institutions and credit institutions to obtain various proposals. This is a process that can be time-consuming and involve several contacts or even visits to bank branches. A credit intermediary does this work for you! With all the necessary documentation, an intermediary contacts financial institutions and requests credit simulations and proposals, so that you can analyze the best proposal for you.
• Save money: Credit intermediaries have privileged relationships with banking institutions, so not only is the process faster, but they also have access to more advantageous credit proposals for you.
• It's a free service: Credit intermediation services have no cost to you, the customer (we'll talk more about this in this article!).

Although it is not a rule when it comes to credit intermediaries, a good professional will also have a lot of experience in the area, good knowledge of the financial institutions with which he works and of what the market trends are, having the ability to act as a guide in the decision-making of his clients.

At Poupança no Minuto, your dedicated agent will follow your process from start to finish, starting with an analysis of your goals and financial situation. There is no credit that is good for everyone - depending on your personal and professional situation, you will see benefits in different things. Those who are investing in their business may want to make a quick amortization of their loan, while those who are starting a family may prefer a low monthly payment that allows for safe management of the family budget and savings for the future. Your Poupança no Minuto agent will take all of this into account and will look for the best opportunities for you, in the right places.

Are the services of a credit intermediary paid for?

For you, the client, the services of a credit intermediary are free! This is because most credit intermediaries are paid by the banking institutions with which they have partnerships, and for whom intermediaries are a source of new clients. It is a mutually beneficial relationship: intermediaries can partner with several banks and offer their clients more advantageous credit contracts for each specific situation; while banks do not need to allocate manpower to client acquisition.

It also makes sense to understand that there are several types of credit intermediaries:

Tied credit intermediary: It is an intermediary that is tied to one or more banking institutions, from which he receives a commission when he concludes a credit agreement.

Ancillary credit intermediary: Here we are referring to retailers or service providers who, in partnership with a banking institution, mediate credits for the acquisition of their products or services. Have you ever been to a large retail store where they offer the possibility of buying appliances on credit? Or a car dealership that also handles credit for the purchase of a car? That's what we're talking about.

Non-tied credit intermediary: It is an intermediary that is not tied to any financial institution. This is the only type of intermediary that can charge you for their consulting and mediation services. These intermediaries may call themselves "independent intermediaries or consultants" and should always enter into a mediation contract with the consumer, in which the terms and conditions of the provision of services are established.

Care to take in hiring these services.

When it comes to fraud in credit granting, caution is key. It's not something new, but it tends to spread, especially through social networks, in times of approaching economic difficulties or when there is an increase in interest rates. Here are some simple tips to protect yourself from these types of fraud: credit granting.

• Pay attention to the approach: in scams it is common to have a direct and aggressive approach through social networks, promising easy or guaranteed credit. A credit intermediary does not actually grant or guarantee the credit, so you should be suspicious of this type of approach.
• Do not advance money: a credit intermediary will not request advance payment in order to "unlock" the credit grant.
• Validate the credibility of the intermediary: all authorized credit intermediaries are registered with the Bank of Portugal. Through this website, you can search and validate the mediating entity.
• Validate the banking entities to which the mediator is connected: On the same page of the Bank of Portugal, you can also see which banking entities the intermediary is linked to.
• Always ask for the FIN/FIP: The Standardized Information Sheet for Credit (FIN) is a document issued by the banking institution that presents the main characteristics of the credit and the pre-contractual information, allowing you to know all the credit conditions and confirm its legitimacy.

There is no doubt that getting a loan for your projects can be a long and demanding process. Now that you know all about the credit intermediaries, you can decide if this is an ideal service for you!