When you approach your bank to enquire about a new home or investment loan, chances are that whoever you’re dealing with will be eager to help.
After all, banks are a business and exists to make a profit, so they need your business. I mean, money is their main business, right?
Many years ago, people had a personal relationship with their bank managers and would usually know each other within the town or atleast outside of the bank environment. This allowed the bank manager to understand your business, income details and sometimes your credibility.
But things have changed significantly over the last few decades, and now when you walk into a bank, you do not always know the person you’re dealing with.
Most banks now days are large corporations, and their role is to sell you products offered by their employees which may or may not be the best financial solution for you. This doesn’t mean bankers are not trustworthy or honest people, just that they are limited in options they can provide.
We’ve put together some interesting facts your bank won’t tell you.
1. They can only offer you limited options
It makes sense doesn’t it, as they can only offer you their own products. Obviously, they can’t tell you about loan products offered by other banks which may suit your circumstances better.
2. Bankers are sales people
Bank employees usually have a budget to meet in order to retain their position. Most have incentives to “sell” you a specific solution including credit cards and insurance. The more products or services you “buy” the more money the bank makes.
3. Mortgage rates are negotiable
If you ask, banks can usually give you a better deal. The annoying part of this is, you have to ask to receive it. You will not usually receive the best offer, first time round. You would have to have the conversation, and be prepared to walk away, should the conversation not go your way.
4. Bank fees are a big money maker
It’s unlikely your bank manager will tell you that their fees are among the biggest money maker for the bank. Be sure that you are aware of every fee you pay, no matter how small, fees can quickly ad up.
5. Some fees can be waived
Your bank won’t tell you this, but sometimes certain fees can be waived, just because you asked.
6. Financial advisers
Some borrowers assume bank employees are trained to help them make financial decisions, but that’s not usually the case. You should seek financial advice from an expert in the field.
7. Who decides on your loan application?
Many people think that their bank manager or loans officer have the final say on approval for a loan, but in reality ‘the system’ will assess your loan application. All your information will be fed into a computer and your application is reduced to a number.
8. You should shop around for the best loans or financial products
Most people just go to their bank for a loan. It seems easier and more convenient to keep their financial accounts in one place and they assume that, because they have been loyal customers, they will get a good deal. Unfortunately, this is not always the case.
You should always shop around for the best deal that suits your individual circumstances.
Remember, this article does not constitute financial or legal advice. Please consult your professional financial and legal advisors before making any decisions for yourself.