A lender that recently reported an 82% increase in dollars settled by the broker channel over the last six months has explained how several pandemic-shaped trends in consumer behaviour have worked together to make the dramatic rise possible.
MoneyPlace head of broker, Alf Vasta, explained that while the group’s personal loan offerings have always been versatile and able to meet a myriad of consumer needs, the turbulent events of 2020 have created several new pockets of demand brokers can benefit from – so long as they're aware of where to pursue new leads.
Below, Vasta highlighted the three areas where the group currently sees the most broker opportunity.
Renovations
Over the past year, people have spent more time in their homes than ever before in the modern world; as such, it should come as little surprise there’s been a surge in borrowers looking for a home loan top up or new source of funding for home improvement.
“With some lenders at that 20 to 30-day mark to assess the deal, you’ve got valuations that haven’t moved effectively or fallen processing to get that top up home loan. By the time the client gets the money, it’s probably been three months,” Vasta said.
“Instead, people looking to do renos can use a personal loan as a stage one. We can get them the funding really quickly, with no exit penalties or ongoing fees.
“Then, once the renos are effectively done, they can lodge the top up app because obviously, the valuation should improve, and there’s not a lot of pressure for the client to get that funding quickly because they already got what they needed when we were able to fund them in 24 hours.”
From time of application to funding, MoneyPlace is currently averaging about four hours – meaning loans are getting funded in less than an hour on a regular basis, Alf emphasised.
Asset purchases
In a similar vein, MoneyPlace has evidenced an increase in asset purchases centred around lifestyle, as Aussies reallocate money they may have been saving for an overseas trip into a form of recreation they can enjoy much sooner.
“Because people know they might not be traveling for a year or two yet, they’ve decided to buy that jet ski, buy that boat or that campervan, and travel around their own state,” Vasta said.
“Personal loans are so versatile to a broker’s kit bag. As long as the purpose is legal, it doesn’t matter to us what the asset or purpose is.”
Gap funding
The surge in both state and federal funding provided for newly constructed homes has led to an increased need for gap funding from customers with good income and good employment, but without the funds to complete due to needing to pay rent, Vasta explained.
“Brokers have been saying, ‘It’s probably cheaper now to have a home loan, where rates are, than it is to rent.’ So clients are looking to get into their own property much sooner,” Vasta said.
“What we do is we plug that last bit, whether it’s for funds to complete or stamp duty or any potential cost in that process.
“MoneyPlace can provide that gap funding loan which most of our competitors don’t do. We’re starting to see more and more mortgage brokers call on us for that need.”
