Hi all,
I beleive it is not about Bank VS Non Bank, it is about Product VS Product!

I am an ex-Power Loan Branch Manager and Senior Service Manager that created a good client base and went on confreneces , etc. over 2 years, so I am very qualified to know what really is behind Power Loan.

The real deal is this: The Power Loan product is no better than any other on the market (There are many at better rate and same flexibility) . They cannot compete on interest rate, that is why they don’t focus on it. The main product is Interstar, which many brokers also use (at lower rate mind you) yet Power Loan consultants are “conditioned” to saying Brokers are crooks! Is that ETHICAL?

It is service that they push, but that really depends on individual franchisees. I can tell you some are good and some are not! Most have had no previous experience in finance and are conditioned to beleive Power Loan is the best thing since sliced bread and if anyone says otherwise, to squash them straight away!

(You watch all the new Power Loan consultants try quash this posting) – see if they are still there in 12 months though and talk to them then.

Not picking on Jace, he is probably a nice guy and told it as he saw it and good on you mate, but Steve from MM Market pointed out some real ALARM bells. This is typical of the inexperienced consultanat they target to sales training!

Power Loan portray an ethical environment but if you ask questions or think for yourself you are quickly told to tow the line and have blind faith.

Don’t get me wrong, at the end of the day I learned something of finance sales ( not much about finance, that I now know ). It is a good business and the loan is fine, but the point is, it is definately not always best for the client!

Only an independant broker can find a better product for a client. Power loan only have one product, because they have to appease the “Packer” (Challenger) group of companies, therfore cannot use other non-bank lenders or banks.

Power Loan consultants are taught to say that ” Interest rate is not the major cost of the loan and that banks fees and charges account for almost half the true cost of the loan” 50%? ? NOT FACTUAL!

I bet not one of the consultants put this into a spreadsheet to find out how wrong this statement is. Try using facts: put $10 p/m fee and add in a transaction fee or two and even a redraw fee here and there see if .5 % interest rate discount would well outstrip the negatives of the fees over the term of the loan.

I don’t like fees either though. Check out the loan products below that don’t have any fees or charges ongoing and are more flexible (some no app fees or val fees either).

Power Loan charges $660 app fee half goes to account manager and half to consultant – fair enough! But $275 Valuation Fee? (of which $55 goes to consultant) therfore their valuation fee should really read $220 – (Missleading! ) which is still quite high!
I’m not sure what other deal they have with valuers, but I know the valuer only gets about $60 -$100 dollars of that.) ETHICAL?

I beleive most of the franchisees and consultants are ethical and good people, but the the company itself you eventually find out is less than ethical. I could tell you much more bit I won’t……. Let’s move on:

Every client has different circumtances, so how can one loan be good for all? Power Loan best rate: 7.45% Interstar
Broker xyz 6.95 % Interstar, Broker abc 7.2 % (SAME LOAN) – but there are better loans out there too!

…And debt reduction is not rocket science:
Have your Pay go diredctly into your loan including additional funds, GST funds, etc, or have a true 100% offsett account and try and keep it there as long as you can. Don’t redraw and spend it!

…That’s it, end of lesson! No need for 12 week sales brain washing sessions!

Here is only a short list products that are currently hard to beat ( remember every client should have a fact finder done before offering any product options)

ING Mortgage Simplifier 6.90% No fees or charges, no redraw fees.
Homeloans Ltd 1-5 yr fixed (7.2% to 7.45%) with 100% offset Account! – no fees, no charges no redraw fees
Macquarie 7.23% no fees, charges or redraw fees – with atm card -NO FEES at any ATM in Austarlia!, no min redraw.
HSBC – have products in this category too! with high LVR’s
Members Equity – even better rates
HomeSide Lending
AC Credit Union – good for families where servicabilty is tight.

The list can go on.

Remember go with a Broker you like and compare products to your circumstances now and in the future. Ask questions!

Cheers,

John 4 Real