The economy took a hit over the past several years. People have been defaulting on loans, foreclosing on their homes, and suffering from financial hardships. As a result of these factors, banks have become very strict in regards to loaning money and are hesitant even in cases where borrowers have decent credit. This has caused a shift towards private loan lenders. People are looking to the private lenders to get both personal and business loans in cases where they have been denied by banks or simply wanted to avoid banks all together.
What is a Private Loan Lender?
A private loan lender is someone who operates independently to loan funds to borrowers and isn’t affiliated with any sort of bank or credit union. Private loan lenders have plenty advantages to them over banks, such as the fact that they are more willing to grant loans. However, there are other advantages to them as well. Some of advantages of choosing a private loan lender include:
Loans for People with Bad Credit: There are private loan lenders who specialize in lending to people with bad credit. Where banks are tied down to the guidelines of the company, private lenders can use more of their own discretion in determining who they decide to lend to. Often times, a private loan lender is the only option people with bad credit have for obtaining a loan.
Easy to Find: You can find a private loan lender either online or local to you. However, it’s easier to search and compare lenders online. There are plenty of private loan lenders to choose from. You can choose the private loan lender who suits your needs and compare rates and fees if you choose to go online.
Easy Application Process: If you choose an online private loan lender you will be able to take advantage of simple application processes. Usually the application process for private loan lenders includes filling out basic information about yourself such as your income, employment status, and citizenship. Depending on what type of loan you’re seeking, you may be required to provide some sort of documentation to the lender such as paystubs, tax forms, or bank statements.
Choosing a Private Loan Lender
The vast amount of private loan lenders available is both a positive and a negative. You have a big pool to choose from, but at times the number of choices can be somewhat overwhelming. There are some things to look into to help narrow down your choices however.
Customer Service: If you’re applying with a lender online, the ability to contact customer service shouldn’t be overlooked. A reliable customer service number will help provide you with some security against scammers.
Interest Rates: Of course you’ll want to look into what type of rates a private loan lender is offering to see where you can get the best deal. Sometimes private loan lenders offer specials or limited time deals for low interest rates. Don’t make the mistake of letting the interest rate be the only factor you consider when looking for a private loan lender though.
Loan Requirements: The amount of requirements that private loan lenders ask for in order to qualify are usually very small. So if a lender requires you to send all types of information and documentation, it may be wiser to go with a private loan lender that is more simple and easy to deal with. Also, if a private loan lender is asking for too much information, it may be a scam and you should tread cautiously.
Fees: Just like banks, private loan lenders to have fees associated with their services. Check out what fees the private loan lender you’re interest in is charging and make sure that they are reasonable and affordable.