New website ignites a lender bidding war to unlock better deals
Imagine a bidding war where lenders fight between themselves to give you the best deal they are prepared to offer.
That’s now a reality with a new online platform allowing you to “auction” the loan you want. The website also uses a clever approach to make sure lenders see you in the best light possible.
When Mihailo Dekic’s home loan surged, he faced having to negotiate a confusing swirl of other lenders and their deals. But he took a different approach, offering his loan to the lowest bidder on new website Lodex.
“Within an hour, home loan offers started rolling in. I got six or seven offers pretty quickly and they’re all better than my existing,” said Dekic.
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He saved half a percent by offering his loan to the lowest bidder on new website Lodex.
“It’s an auction style marketplace where banks and brokers literally bid for your business as opposed to you having to go out and seek the best offer or rate from a bank or a broker now they’re coming back to you,” Lodex Founder Mic phillipou said.
The platform offers home, car and personal loans.
If you agree, Lodex will build a picture of you beyond your credit score by creating a social profile using 12,000 points of your online data.
“What studies have shown is, the way you behave and interact with your friends, your family your employer, correlates directly with the way you’re likely to behave when you repay a bank a loan,” added Mr Phillipou.
It’s especially helpful for those without a credit rating – say, students or immigrants.
The social media context provides quite a good indicator of potential risk so, I think it actually offers a new lens, if like, on risk and consumers may, potentially, get a better deal as a result,” said Martin North, from Digital Finance Analytics.
Trustbond, another business, enables potential tenants to pay a small insurance fee rather than an expensive rental bond by using their online reputation rather than credit scores.
“We believe it’s a more powerful way to measure trust. So every time you ride share, house share, freelance or buy and sell in a digital marketplace you’re building your online reputation,” said Trustbond’s Will Soutar.
Partnered with insurer Suncorp, Trustbond operates in South Australia for now, but is negotiating with other states.
In highlighting particular offers we are not making specific recommendations as this article does not cover all available products and may not compare all features relevant to you. Any advice provided is general in nature and does not take account of your needs, objectives or financial situation. Individuals should consider their own circumstances, and if in doubt seek appropriate advice, before proceeding.
In providing a link to the Lodex. website we are not making a specific recommendation, you should refer to the terms and conditions applying to that website, its contents and use.
*As a result of services provided by us RateCity Pty Ltd may pay us a percentage of any fees they receive from their providers, for further details see RateCity’s Financial Services Guide available here.
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