A private money lender is an individual or institution that offers loans to people with less-than-perfect credit. Private money lenders typically have higher interest rates than banks or other traditional lenders, but they can be a good option for borrowers who cannot qualify for a conventional loan.
Do your research.
Before you even start looking for a private money lender, it is important to do your research. There are many private money lenders out there, and not all of them are legitimate. There are also many private money lending scams, so you need to be careful. There are a few things you can do to research a private money lender:
Check with the Better Business Bureau: The Better Business Bureau (BBB) is a good place to start when you are researching a private money lender. The BBB keeps records of complaints against businesses, so you can see if there have been any complaints filed against the lender you are considering.
Read online reviews: There are many websites where you can read reviews of private money lenders. This can be a good way to get an idea of what other borrowers have experienced.
Talk to people you knows: If you know someone who has used a private money lender, ask them about their experience. This can give you some insight into what to expect.
Know what you need.
Before you start looking for a private money lender, you need to know how much money you need to borrow and what you will use the money for. pocket listings will help you narrow down your options and avoid lenders who are not a good fit for your needs.
Shop around.
Once you know what you need, you can start shopping around for a private money lender. There are many lenders out there, so it is important to compare interest rates, fees, and terms. You can use a website like LendingTree to compare offers from multiple lenders at once.
Read the fine print.
Before you agree to anything, be sure to read the fine print. Private money loans often have higher interest rates and fees than conventional loans, so it is important to understand all of the terms and conditions before you agree to anything.
Be aware of scams.
Unfortunately, there are many private money lending scams out there. Some common scams include lenders who:
Charge high fees: Some lenders will charge high fees, such as an origination fee, just to apply for a loan.
Require collateral: Some lenders will require you to put up collateral, such as your home or your car, to qualify for a loan.
Promise guaranteed approval: No lender can guarantee that you will be approved for a loan, so be wary of any lender who makes this claim.
Pressure you to make a decision: A legitimate lender will give you time to decide on a loan. If a lender is pressuring you to make a decision right away, it is probably a scam.
Use a reputable lender.
There are many reputable private money lenders out there. Some reputable lenders include:
LendingClub
Prosper
Avant
SoFi
Get everything in writing.
Once you have found a lender you are comfortable with, be sure to get everything in writing. This includes the loan amount, interest rate, repayment schedule, and any fees or charges. This will protect you if there are any misunderstandings about the loan.
Make sure you can afford the loan.
Before you take out a loan, be sure that you can afford the monthly payments. Private money loans often have high-interest rates, so you will need to make sure that you can afford the payments. You should also make sure that you have enough money left over each month to cover your other expenses.
