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Private loan lenders
Private loan lenders can be referred to as lenders who are non – bank individuals or companies that loan money to people.
Private loan lenders also have high interest rates than loans taken from traditional financial institutions. Private lenders are considered one of the oldest forms of lending. They do not have a rigorous assessment of loan applications like traditional banks.
Everyone needs private loans every now and then but sometimes its not that easy to get private loan lenders. That is why you have to search till you find the lender that suitable for you.
Why do borrowers opt for private loan lenders
People are choosing private loan lenders because the central banks and traditional banks have increased their requirements. It has become difficult for borrowers to keep up to these requirements because they need their money fast and can’t wait to go through several processes before getting the loans they need.
This has given rise to alternative lenders such as private loan lenders the avenue to provide services to those who need private loans.
Private loan lenders who give out private loans are usually not regulated by the state and do carry some amount of risk. Private lenders use their own discretion to determine who gets a loan from them.
Where to get private loan lenders
Many private loan lenders can now be found online. They have moved away from the traditional brick and mortar system. The online system is easier and much simpler for those applying for loans nowadays.
It will only be in a few cases where the lender will request your presence for verifying some information or complete the application process. The information shared between you and the lender is strictly kept confidential and this gives those looking for loans more confidence in private loan lenders.
In spite of this scammers are also on the rise and private loan lenders are putting measures in place so their clients don’t fall prey to such schemes. It has in the past made borrowers a bit skeptical about giving out their information. Now lenders have made it easier for individuals looking for private loans to get them. The process is not too difficult or cumbersome.
The genuineness of private loan lenders
There are genuine private loan lenders who give loans to those in need of them. You just have to look out for the reputable ones. What to note is that even genuine lenders are in to make money and thus will look for ways to do so. As a borrower looking for private loans, you can aim at choosing a lender who will meet your specific needs.
This will prevent you from falling into the hands of the wrong people. Those who are a bit shaky when it comes to getting loans from online private loan lenders are the ones who have not had a good experience with online lending. Genuine private loan lenders exist, you will only have to search for them.
Friends and family can be a source when looking for private loan lenders
Family and friends have been one of the most reliable sources of private loans. In recent times when people have needs and they have exhausted all their options, it is family and friends that serve as private loan lenders to those who are in need of loans.
Family and friends will give you flexible payments terms that will be good for you. These private loans can be used for different purposes. They include supporting new businesses, buying a new car, paying your rent or even supporting yourself whiles you find a new job.
What to keep in mind is that you will have to pay back the loan granted to you so that your relationship with family and friends will not be affected. With family and friends, the terms of the loan are not overly official and you can negotiate your payment terms. There is usually minimal or no interest on the loans they give to you.
To get the best out of private loans that family and friends give, you should attach the same seriousness and respect that you will give to banks, credit unions and other lenders.
Private loan lenders give fast loans
Since private loan lenders are not bound by overly strict rules, the means of getting such loans are faster. They have their own regulations that they abide by which is different from how the mainline lenders operate.
Borrowers know that even with bad credit, they have a chance to get the loans that they need from private loan lenders. Even though the banks are giving lower interest rates than private lenders, people still prefer to go to private lenders because they are a bit lenient in their processes.
With banks, it can take more than a month and sometimes even more for them to grant you the loan. This is definitely not a good picture being painted to those who need to solve emergencies as quickly as possible. That is why private loan lenders are preferred.
Benefits of private loan lenders
1. Their loans are easy to get – Those who want to borrow from them do not have to fill lengthy documents. The basic information that is taken includes name, address, phone number etc.
2. It does not require collaterals – Private loan lenders usually give loans without collaterals or guarantees. They are aware of the risk that non-payment of loans poses to them and hence they prepare adequately. That explains why they have higher interest rates than the traditional lenders
3. Private loan lenders offer flexible terms and conditions – You can get good interest rates and flexible terms and conditions when you opt for private loan lenders. The fact is: private loan lenders do not have the immense pressure to be bound by certain laws as the mainline lenders have. You will be able to negotiate the terms that will realistically be fit for you.
Disadvantages of getting loans from private lenders
1. High interest rates – The fact that no collateral is attached to loans taken from private loan lenders makes it a high-interest type of loan to borrow. Those with bad credit history are likely to be declined their loans from mainline lenders. They, therefore, take to private loan lenders. With this, the interest rate will depend on the time the loan will be repaid. The longer the payment scheme the higher the interest. You can discuss all the available options with the lenders to avoid any confusion in the future when its time to pay back the loan.
2. The federal government has less control over private loan lenders – The mainstream lenders have suffered a lot of losses in loans that could not be paid hence their guidelines have tightened. These commercial banks are under regulation from the federal government and thus have strict regulations on their lending practices. This can increase the possibility of private lenders exploiting their customers because there is no regulation on their activities from the central bank.
3. Consequences when payments are missed – Once the agreement is signed you would have to ensure that you keep to the end of your bargain to avoid consequences that you are not ready for. A breach of contract between you and the lenders may make relationships sour. You, therefore, have to be watchful to make payments when the time is due.
Private money lenders are also very common in the real estate market. They include institutional investors, real estate brokers, private individuals, hedge funds and even family members.
Private loan lenders lend on a short term basis with high interest rate and sometimes upfront fees. Those who can show them a solid repayment strategy will get the loans that they need.
Disclaimer: All loans offered through this website are subject to credit and underwriting approval. AfterLoans.ca is a lead referral company, not a lender. AfterLoans only works with financial service providers that adhere to Canadian laws and regulations.You can borrow up to $20000. Loans amortization is between 6-36 months. APRs range from 19.99% to 55%. The actual APR charged will depend on the lender’s assessment of your credit profile. For example, on a $1000 loan borrowed for 12 months at 29.9%, the monthly payment will be $97.24; with a total repayment, including interest, of $1166.88 There is also lender’s optional loan protection policy. In the event of a missed payment an insufficient funds fee of around 45$ may be charged (dependent on the lender). If you default on your loan payment plan the lender may terminate the plan and the remaining balance will become payable immediately. Our lenders employ fair debt collection practices, but will pursue the payment of Outstanding debts to the full extent that Canadian law allows.