Loans with / without Insurance

**Qui Gon Jinn** · 10-05-05

When looking at loans programs, it appears quite a few sell insurance as a bolt on.

Do financial services companies receive more commission on the insurance policy attached to the loan rather than the loan itself?

If so would it be more prudent to check for this in relation to selecting a loan program and who is actually offering a good commission structure?

Are there any loan programs which pay a hybrid of ALL of the following

The Initial Application
A % of the brokers commission if the loan is accepted
Plus a bounty or % of the brokers commission if insurance is taken out

It's just that we see some loan applications go through for serious money 100k plus. and receiving just £30-50 or whatever seems disportionate.

Especially mortgages where a life insurance or mortgage insurance policy might be attached to it.

**drivetowin** · 10-05-05

Yes they do receive more commission for the insurance policy (and in some cases they make more from the insurance policy commission than they do from the lender for setting up the loan).

If they are writing the loans themselves then there are also benefits in the way loan accounting is structured which means they can take the income from insurance into profit sooner which makes their own financial accounts look far healthier than if they were just writing loans.

**John** · 10-05-05

Originally Posted by Qui Gon Jinn

Are there any loan programs which pay a hybrid of ALL of the following

The Initial Application
A % of the brokers commission if the loan is accepted
Plus a bounty or % of the brokers commission if insurance is taken out

Yup, one of the programs we manage (First Aid Finance on buy.at) offers this exact structure. We pay a small cpa (£1) purely to indicate how many leads you have sent through - all genuine leads will be paid out regardless of whether they qualify for a loan or not.

The real meat of the program though is a 20% cut of the brokers commissions, including the commission from any insurance that is sold. As the average brokers commission is around 8.5% of the loan value, if you're sending through £100k+ loans... well you do the maths!

If you want to know any more about the program, you can catch Mark Russell (who is managing the program for us) @ the get2gether on Thursday, or the buy.at speakeasy on Friday, along with a couple of the guys from First Aid Finance themselves. For those not attending the speakeasy, you can also get hold of Mark on mark@bigideamedia.com (e-mail and msn)

**Mogga** · 11-05-05

Originally Posted by John

Yup, one of the programs we manage (First Aid Finance on buy.at) offers this exact structure. We pay a small cpa (£1) purely to indicate how many leads you have sent through - all genuine leads will be paid out regardless of whether they qualify for a loan or not.

The real meat of the program though is a 20% cut of the brokers commissions, including the commission from any insurance that is sold. As the average brokers commission is around 8.5% of the loan value, if you're sending through £100k+ loans... well you do the maths!

On buy at it says:
First aid finance is a fast growing secured loan broker. Loans are available in amounts from £3000 to £250000
currency GBP(£)
commission £1 per lead
referral period 30 days

So who gets the 20% of brokers commission?

**John** · 11-05-05

To clarify, the 20% of broker's commission is paid to affiliates upon completion of a successful loan application. The CPA is paid regardless of whether a successful loan application is made (as long as the leads are genuine).

**Steve Jennings** · 13-05-05

If you are looking for that kind of relationship you are really moving more towards being an introducer than just an affiliate and you then need to start considering Consumer Credit Licences and FSA regulation, which is a lot more straight forward than most think, but it may be to far detached form your day to day business.

If you can find someone who will pay you a decent amount per lead for every homeowner loan lead you provide and they pay on time etc then you may be as well staying with them (you probably won't find them on any of the networks though) - but its worth clarifying what they consider a valid lead, and looking at conversion rates both in terms of unique visitors who complete the form and leads that are validated.

As an introducer you will probably only be looking at a % of the completion commission initially until you have got a decent track record and proved how good your leads are, and you may then be able to negotiate a split of a small amount per lead and a cut of the back end, but if your leads are good you will be able to earn a very good income just on the completions anyway.

Another thing to consider is conversion rates, in my experience 80-90% of the people looking for a loan online are not home owners and there are very few programs that will pay you well, if at all for these leads.

If you PM me and let me know some more info on what you are looking to do I can give you some more info and maybe the contact details of a couple of people worth speaking to.

Hope that helps.