Legal Definitions - loan broker

A loan broker, also known as a mortgage broker, is a person who acts as a middleman between a borrower and a lender. Instead of a borrower directly borrowing from a lender, a loan broker can help the borrower find a lender that meets their financial goals.

For example, if a business owner needs a loan to expand their business, they can use a loan broker to find a lender that offers lower interest rates and better terms. This can save the borrower time and money.

However, using a loan broker can come with a fee. The fee can be charged to the lender or the borrower and can range from 1% to 17% of the loan amount. For some small businesses or individual borrowers, it may be more reasonable to borrow directly from a lender.

Overall, a loan broker can be a helpful resource for borrowers who want to find the best loan options available to them.