When applying for credit, do you have to pay a processing fee?
Yes, but rarely is a direct upfront payment. Whether you apply for a personal loan with a broker or a bank, they must invest time to build a file in which certain mandatory documents cost a certain amount to obtain them.
We write this guide after we had a lot of questions after we published the Upfront fees in loan applications – is it ok to be asked to pay?
So, the actual question is: who pays these fees? The broker, the bank or the customer? And how are these application fees billed?
Fees charged to the client
All the documents necessary for the constitution of a file such as the extracts of the office of the prosecutions, the identifications with the post office, the certifications of the originals and other more specific official documents requested on a case by case basis are the responsibility of the customer.
However, these fees are never directly billed to the customer! In this case, how are these hidden costs passed on to the customer?
With a bank, charges are reflected in the rate
Basically, it is the banks themselves who obtain the documents, and that your credit request is accepted or refused, no charge is directly invoiced!
Certainly, but indirectly they are, because they are carried forward on interest rates!
At some banks, if you apply for credit online, your interest rate is X%, but in return you will have to take the steps to get and provide all the documents yourself, for which you so pay directly with your pocket and with your time. However, if you go through a counter, the rate climbs to (X+2)% because you mobilize staff.
With a broker, no additional fees!
Banks remunerate business rapporteurs by redistributing part of their earnings. Therefore, going through a broker, you will not pay any additional fees.
Bankers like to take fees, as if they could not make enough money with credit as such! These credit file fees have no meaning, especially since they must be taken into account in the expression of the costs of credit file: they are therefore absolutely to be avoided!
On the one hand for some marketing tricks that will make it possible to express more interesting prices excluding fees, and on the other hand to win more pardi! Because you must know that these credit charges are collected immediately by the bank. So it’s money that comes in faster and if you made an early repayment in the future, it would still be taken for them.
Pay attention to the point of sale credit report
Those who still regularly take credit charges, these include the dealers as for the credit. You will also find many craftsmen who will be able to take fees of file for credits work which will accompany your installations. This is particularly the case with the kitchen credit.
Nothing illegal about this but what must be ensured is that these costs are included in the APR rate of credit, because it is the law credit consumption it imposes. This is the reason why our comparative credit is based on this rate. It includes all possible costs of a consumer credit such as the application fee for example.
For all these types of credit, if you want to make sure to find the best rates, just look at our comparative credit which will offer you a ranking of the best rates charged by the largest credit agencies for all types of projects. Moreover, our exclusive questionnaire allows to give an evaluation without commitment of the possibility or not to obtain concretely each of the best rates.
Application fee for credit refinance
This is the last category in which there is still a regular fee. A refinance of credits is an operation consisting of taking back all the credits in a single loan whose monthly payment will be reduced.
This solution is the right option for loans that are difficult to repay. It is generally carried out by specialized brokers who will constitute an important file composed of all the justifications of the existing credits and a complete file on the applicant.
With this file, the broker will negotiate with banks and credit agencies the opportunity to restructure the debt within a new credit refitted.
There are brokerage fees to pay for this work, of course. But they will only be paid if the broker succeeds in obtaining the new credit granted, and not from pocket but from the obtained loan.
In this case, there may also be fees to be paid in addition to the bank that will accept the new credit.