BROKER LOAN Meaning and
Definition
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A broker loan is a loan facility that is obtained through the services of a broker, who acts as an intermediary between the borrower and the lender. In this arrangement, the broker assists the borrower in finding a suitable loan product and lender, while facilitating the application and negotiation process.
Typically, a broker loan is obtained when the borrower lacks the time, knowledge, or access to multiple lending options to secure a loan directly from the lender. The broker, who is usually well-versed in the lending industry, takes on the responsibility of researching various loan products, comparing interest rates and terms, and recommending the most suitable options for the borrower's specific needs and circumstances.
Moreover, the broker loan process entails the gathering of necessary documentation, preparing the loan application, and submitting it to the lender on behalf of the borrower. The broker also negotiates with the lender to secure favorable terms and conditions, handling any queries or additional requirements that may arise during the loan approval process.
While the broker loan provides convenience and expertise in navigating the lending landscape, it is important to note that brokers may charge a fee or commission for their services. This fee is typically a percentage of the loan amount or an agreed-upon flat rate. It is crucial for borrowers to fully understand the terms and costs associated with using a broker before engaging their services.
Etymology of BROKER LOAN
The term "broker loan" is not a widely recognized term in the English language. However, if we break down the etymology of the individual words, we can understand their origins:
1. Broker: The word "broker" originated from the Middle English word "brocour", which came from the Anglo-French word "broceur". It ultimately finds its roots in the Old French word "brocheor", meaning "small trader" or "retailer". The term entered the English language in the 14th century and initially referred to a wine merchant or retailer. Over time, it broadened its meaning to include someone who acts as an intermediary or agent in various financial transactions.
2. Loan: The word "loan" comes from the Middle English word "lonen", which can be traced back to the Old Norse word "lána" or "láni".
