Non bank Lenders Good or Bad?

Hi Zorne, I also work at Power Loan and reguardless of what other people have said, I can assure you that this is a highly ethical company, and you should continue going to the Power Money Course, as this is THE FIRST TIME THESE COURSES HAVE BEEN IN ACTION.

As you can tell Matt the branch Manager does not sell anything, he is focused on explaining the myths behind the finance industry.

I encourage that you get in contact with your service manager, and or the Branch Manger to discuss any issues or confussion…

Once again thankyou Zorge.

I left after the westpoint crash, i didnt feel comfortable working on the expos, often having clients telling me they were caught up in it, although i do not believe powerloan was at fault and unfairly named in the media, i do feel there is a lack of communication in the risk of this kind of investment , they have a very high return to cover the borrowing cost and the people who are being sold these products really should have a highly sufficient income to be able to cope with such a problem, its borrowed money ya know? the “what if” needs to be explained.but again i dont know what is said behind the financial planners doors, i just know what i was told to say…powerloan is highly ethical and has a great environment, i read someone else on this forum say “its easy to get caught up in”.

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

I was going to point these links out to you and some other info on these guys when I read your first post Zorge, but refrained, as you seemed pretty keen on them, and not overjoyed when a few others who were in the know commented. Anyway, the way I see it for finance is this 1. BANK. If they are friendly and reasonably comptetitive, and you have an easy going relationship with the relevant person…go for it. it is amazing how much the bank will …ah ‘overlook’ if they are comfrotable with you. 2. NON BANK LENDERS. Most of these guys will try to be your ‘mate’, and if their figures look good, why not try one? Bit more personal in most cases.Wizard come to mind (Sorry…not affiliated with them, but they work so hard on trying to build long term relationships. 3, BROKERS. If you have a genuine guy/gal that has the attitude that while they make money they are helping people too, and enjoy it I think they would be hard to go past….obviously they will need to have access to a numbe of lenders to be able suggest a package for you. But brokers have to go through a lot of study before they can advise, and generally will be far more knowledgable than your standard bank ‘personal lender’. And….finally, all this talk about fees, rates etc etc. the AAPR (Annualised Annual Percentage Rate) or ‘comparison rate’ really does take everything into account, so as long as all other things are equal, the loan is right for you, and you are comfortable in dealing with the ‘lender’, the lowest rate (Comparison rate) IS the cheapest loan, regardless of fees etc. However, some of the loans with the lowest AAPR may not accept your application, so you try the next best/most suitable one. THIS is where the Mortgage Broker is a great idea. Just a side point, so many people talk about all the ‘bells and whistles’ on loans, but really, for investment purposes, most people wll only ever be paying interest only, and any ‘spare’ will often be going into another property…so my personal thoughts would be to keep your loan simple. a basic variable, or fixed, as you prefer. Now…..go and buy a house while they are cheap Zorge!. All the best.[suave3]

i havent seen the word Power Loan used in so many posts at once…If you sign up on this forum your either wanting help or like to give it. I am here to help people achieve their dreams, buying a house, helping them invest, what ever they need. i wouldnt be on here for any other reasons, i like to put myself in the client’s shoes and to think about what i would do in their situation.

Honestly, i think this topic has been made to endorse the Power Loan Franchises and its employees.

Cheers

Joshua McEwen
Finance Broker – WA

http://www.prestigeloans.com.au

Brokers Lic 1297
Licensee Brett Christie

I think we can nail this topic shut now? Not that I am a moderator or anything, but I did give one reply that I hoped would be helpful, and others with more experience/finance wisdom than me have done similar…….what is that expression about a brick wall again? A local TAFE course in spelling or workplace communication will go no end to assisting with making financial and other decisions, then perhaps consider talking to some banks, well known non-bank lenders, or MIAA qualified Mortgage Brokers I reckon. That bottle of Shiraz beckons me to finish it…….. [offtopic][sleepyanim]