How should you navigate through loans?

Loanerr, a debt management company, was recently founded by U of T Alumnus Scott Nazareth, who graduated in 2015 with an Honors Bachelors of Arts in Political Science and a history of religions minor. His company’s primary focus is helping students gain financial literacy on and off campus. Not only has Loanerr experienced success since its start-up, but in 2015 and in 2016, Nazareth was listed as the top 50 mortgage brokers under the age of 35.

Today, we are in a loan ecosystem that is primarily made up of big banks, credit unions, financial institutions, and insurance companies. However, there are independent contractors, such as mortgage brokers. This leaves the middle: where the consumer stands. The consumer has the choice of either going directly to a bank or contacting an insurance company instead, generally under pressing situations.

This is where Loanerr plays its part.

Loanerr shifts the power of choice to the consumer through pure transparency of all the available options through the company and the broker channel. This allows the consumer to make comparisons and selections, rather than have a broker make a few suggestions that may comprise of only a few products out of the hundreds.

Nazareth’s entrepreneurship journey began through his work experiences during his time at university. He started working in a company that specialized in marketing and sales, which gave him a kick-start in understanding financial advice, the sales process, and educating consumers, while also familiarizing himself on debt insurance and home insurance.

After about two years, while still a student at U of T, Nazareth was promoted to a specialist position, and after three months, got promoted to a quality assurance position. In this position, he dealt with companies such as American Express and Canada Life.

Nazareth was then promoted to team captain and campaign coordinator.

“I then realized that such structure wasn’t for me, where I couldn’t implement new initiatives without going through channels and bureaucracy to finally get things approved. I thought it would be a better fit for me to get into a consulting role. I got my mortgage license in 2014, and I started learning the ins and outs of mortgage financing, personal financial statements,” says Nazareth.

“I started learning how different Canadians over a wide age demographic manage finances over time and take on new debt, as well as carrying debt over five, 10, 15, 20 years.”

Nazareth adds, “I started noticing that for new home buyers, their student debt just remained on their balance sheets with just minimum monthly payments. It is a big factor in applying for a home. When you have a big amount of student debt on your balance sheet, you may be forced to buy a condo. With a condo, you might think that you are saving because you’re purchasing something with a lower price in property, but when you end up having to pay monthly fees, you are actually paying more on a monthly basis.” Nazareth wanted to find a permanent solution, which led him to create Loanerr in February 2016.

Nazareth suggests starting with developing a budget, to aggressively factor in an amount of disposable income after writing out the bare necessities’ costs. He suggests putting this money directly towards debt, or to put it into an interest-bearing account where you can then make lump-sum payments every year.

Nazareth also suggests that individuals make it a weekly routine to check bank account details by downloading the app for their financial institution, so that they check how much debt they have.

Budgeting software, such as Mint, are also helpful resources. In terms of car loans, if people have the money to pay 50 to 60 percent upfront, shopping around for the best rates and ensuring that they understand any existing penalties will aid in making the right financial choices while buying a car.

Currently, Nazareth is a mortgage agent at Dominion Lending Centres. Loanerr is a fairly recent start-up and can be found at 1444 Dupont Street in Toronto.