How to become a loan broker in Canada
If you want to become a loan broker in Canada the good news is that it won’t be hard especially if you already have the clientele. Being a loan broker can rewarding but in can also be very hard and you’ll also want to factor in the fact that the loans you will be offering will be high interest loans.
If you become a a loan broker don’t expect schedule 1 banks like Scotia Bank or CIBC to work with you if you want to be an independent loan broker you’re going to have to work with the loan sharks if you expect to make any money. If you want to make a lot of money STAY AWAY from the personal loan market because not only do personal loans not pay much (maybe $50 per client if you’re lucky) and they also come with the most problems and usually the hardest to fund because generally Canadians with decent credit will go to the banks first and go to the personal lender last.
One of the places to start is “auto loan lenders” as a broker you can make from around $200 – $1000 per sale. You can also make money as a broker find more information about “car title loans lenders” this are okay. If you have maybe a payday loan business you can use these possibly to gain more capital. That said there is also “Payday loan lenders” In my opinion if you don’t own a payday loan company it would be better to work as an online affiliate of a payday loan company because these loans typically don’t pay much maybe from $25 – $300. Another good way to make money as a loan broker is to be a “credit card loan brokers” sure usually you won’t make more than $100 per approved application but it’s extra income also don’t forget about the prepaid credit card industry
Become a loan broker in Canada and make great money
If you want to make a good money as a loan broker you’ll want to get into business loans and mortgages. In most parts of Canada the mortgage industry is regulated so if you want to be a mortgage agent or mortgage broker you’ll have to take some kind of training and get registered with FSCO. However you can make money as a referral agent for most Mortgage brokerages. Most brokerages won’t pay more than $500 per funded mortgage and being that most Canadians guard their mortgages with their lives you might find that this will be a tough job for a measly $500.
This is why if you want to make money as loan broker in Canada the industries of choice are “Merchant Cash Advances” and “Invoice factoring” Merchant Cash advances typically deal with restaurants and invoice factoring companies typically deal with transportation companies that have overdue accounts receivables. I’m not going to go into detail on how both of these work but the pay with these industries can range from $500 – $10,000 per funded deal and with both you as the loan broker have the potential to make residual income. Also working with business people is a lot better than working with individuals because business people are usually more financially savvy than say an employee who works a 9 – 5 job looking for a mortgage or a personal loan.
Plus the time to get a loan for any industry will cost you the same which is why most loan brokers in Canada think BIG! In regards to boat loans and other loans you can attempt to become a loan broker for boats but expect similar financial results as you would from issuing auto loans or car title.
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If you’re looking for a company that has access to a bunch of lenders in Canada at the moment that doesn’t exist and the reason it doesn’t exist is because the financial industry in Canada and around the world frequently goes through changes and the financial products being offered from individual Financial institutions frequently change as well to match these governmental changes.
For any one company to have such a service would come with a hefty fee because of the time it would take to gather all this information about the laws pertaining to it. When I say I hefty fee a mean like $10,000 to start – plus a per month fee for maintenance. Money runs the world and governments typically take anything related to money very serious and clamp down on the loan shark industry first. An example of this is the subprime mortgage market in the United States.
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The mortgage in Canada industry for example goes through frequent changes and if you want to become a loan broker I highly recommend that you avoid regulated industries that deal with the public because most of the people looking for loans offered by loan sharks are bad with money and they’ll usually blame you “the loan broker” for their financial misfortunes. Although they might not blame you directly they’ll complain to government agencies that may look into their complaint if it becomes more and more common.
I recommend being a loan broker for businesses. I want to add that banks and credit unions that offer loans at good interest rates usually won’t work with loan brokers because typically they have business owners lined trying to get a loan from them. If you expect to be a successful loan broker you’re going to have to start off by getting people or businesses into high interest loans. So if you can do that you’ll be successful if you know you can’t! I would avoid becoming a loan broker.
I wanted to also touch on “Hard Money lending or lenders” This is another way to make money as a loan broker but you would have to find these individuals on your own as this industry is one that can be quite difficult as well as one that can be hard to stomach if it goes wrong.
Making money as loan broker won’t be easy
In closing I want to add that the loan brokers that make the most money usually already have established businesses. Established businesses that already have customers usually make the most money as loan brokers. When you already have customers these is an excellent way to supplement your income however for those of you that want to get rich quick being a loan broker it won’t be easy especially if you’re an individual without an office or clients because typically people won’t trust you with their PRIVATE FINANCIAL INFORMATION Individuals or business owners with brick and mortar businesses will usually yield the best results.
As a loan broker it’s important to understand that you’re nothing more than a SALESPERSON for the financial institution(s) that you’ll hope to represent, so you’ll have to pay for the advertising, you’ll have to go door to door and you’ll have to do all the leg work as an affiliate for the financial institution you’ll represent. I should also point out that some companies don’t pay or they might have a threshold that you’ll have to reach before they’ll send you an actual paycheck so make sure you understand the terms and conditions before working as a loan broker for any company.
The financial services business is one of the most scrupulous in the world. I don’t say this to hinder or stop you from becoming a Loan Broker I say this to show you the reality of the situation. The only get rich quick scheme is winning the lotto! Every other route to riches unless inherited will require diligence and some work. I also advise the readers to monitor the money they make and spend as a loan broker because you will have to pay Taxes on the profits you make either as an individual or as a corporate entity!
There are other types of loans available you can look them up independently skies the limit there is also equipment loans and commercial mortgages however be warned that these usually will require a bit of experience as funding complicated deals can take months.
Good luck please leave your comments or questions below.
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