The above heading is a bit of a provocation and is a response to Cream Credit ‘s heading “Reading makes record profits on debt-laden customers”. True, what Cream Credit writes is true, many debt-Lenders are turning to Binary Lender to settle old expensive credits with a larger loan, but that’s not the whole truth behind their fine profit of USD 152 million in 2016.
There are lots of customers with good finances who are looking for a loan broker Binary Lender when they need a loan. They do this partly because they do not want to contact a lot of banks on their own, and partly because they do not want lots of credit information to be taken on them. So the fact that Binary Lender ‘s big profit depends only on debt-burdened customers is not right, because in such cases they would not cooperate with banks such as Cream Bank and Best Bank because these banks rarely accept debt-burdened customers, especially if they have credit.
Unreasonable interest rate?
Binary Lender is a loan broker that launderers loans from a large number of banks and credit companies and the effective interest rates usually end up at 4.95 – 17.55%. What Cream Credit is disturbed about is obviously Binary Lender ‘s highest interest rate of 17.55% and that the customers who receive this high interest rate are debt-burdened. Although it is not surprising that people with lower credit ratings receive a higher interest rate than others, especially if they have remarks. The greater the risk the bank takes, the higher the interest rate, it has always been in the financial world and so it will remain. High-risk customers who need a loan may either pay a high interest rate or they may not borrow at all.There is nothing strange about that.
Debt gets a chance
So is it wrong that Binary Lender also cooperates with credit companies that turn to people who normally find it difficult to get credit and who take a higher interest rate? . Just as Binary Lender ‘s CEO Janine Cobbedo said in the express interview, the interest rate is still lower than the sms loan and the loans that the customers settle have even higher interest rates. Thus, Binary Lender ‘s partners allow debt-burdened customers to lower their interest rates, which in turn gives them an opportunity to manage to repay their loans.
For example, if the customer has several sms loans and / or other short-term credits that the customer has difficulty coping with, is it still better to be able to settle these credits and get an amortization plan that the customer can manage than that the debts end up with debt collection and closing with Kronofogden instead? In addition, the default interest rates are often higher than 17.55%, which means that the debtor is more indebted if the debt falls to the debt collector / the debtor than if the debtor took a loan via Binary Lender. So we would like to say that Binary Lender helps debt-laden customers instead of stealing them. What alternative would the debt-laden person have otherwise? Probably nothing more than to let the debt go to a debt collection company and (in the worst case) end up with a payment order. After all, there is no elevator exactly.
At the same time, it feels a little strange that Binary Lender is accused of making money on debt-laden customers, since the loan is not actually taken with Binary Lender but with a credit company. Sure, Binary Lender also makes money on this, but the credit company that offers the loan is where Binary Lender is or not. Reading only makes the company more visible to the customers and the customer decides whether or not to accept the offer. It is the customer who visits Binary Lender, not the other way around. So the need is there and it is hardly Binary Lender ‘s fault.
Can squeeze interest rates
It is also not Binary Lender that decides what interest rates their partners should set, but it is very possible that they can squeeze interest rates because Binary Lender has become an important link for them. For example, they cooperate with Across Lender, which has a maximum interest rate of 19.8%, but despite this, Binary Lender ‘s ceiling is 17.55%, which indicates that Binary Lender can actually give their customers a better deal than they might otherwise have, but not always of course.
And the fact that Binary Lender ‘s fine profit margin would show that Binary Lender is not particularly competitive is just a sham. There are lots of tough competitors out there, just check out our list of loan brokers and you can see it clearly.