Loan Comparison Sites – How Do They Make Money?
Finding a personal loan, credit card or mortgage to help fund large purchases or even buy your dream home can be time consuming and confusing, so thankfully there are online tools to make the search simpler and quicker.
One such loan comparison site allows you to quickly search across a wide variety of lenders and loan products all on one page. Simply enter your preferences and criteria on the site, which will then return loans that might suit you. Some comparison sites even allow users to pre-approve lenders; this means the site has already evaluated your application and given its opinion as to its success; pre-approved lenders increase the likelihood that you’ll get approved – it may even increase it! So be sure to see if your desired lender offers this option!
Loan comparison websites are extremely popular in Australia and have helped many individuals to secure loans that meet their specific requirements. Loans, hotel rooms, insurance and bank accounts can all be compared these days! Yet these websites must make money somehow; how exactly?
Comparison websites usually make money through referral fees, which are payments made directly to them whenever someone clicks through to a provider listed on their site. Other sources of revenue can include loans taken out directly through them, advertising revenue or subscription fees to market information databases.
Some comparison websites also provide premium versions of their service with additional features like eligibility checkers. This can be especially helpful if you need financing for property, as it ensures that repayments will not become an unmanageable burden.
Before providing personal details on any comparison site, it is also wise to check whether or not they conduct either a soft or hard credit search on you, which could potentially impact your report but only visible to yourself and the lender that is reviewing your application. In addition, check if they own and operate their website independently from lenders; and be mindful about providing too much personal data online due to cyber fraud being on the rise.
Future comparison sites could become more sophisticated by adopting account aggregation technology, which is an emerging form of financial data aggregation that will enable businesses to accurately assess user solvency and spending patterns more accurately, qualifying leads more efficiently, and eventually creating higher levels of revenue per lead for both comparison sites and their partner moneylenders to offer cost-efficient loan and credit solutions to customers.