The Pros and Cons of Getting Personal Loan from Private Lenders
When the going gets tough financially, it is natural to look for every possible way out. Just like every other person looking for some funds, you sure begin with the banks, the most traditional and trusted channels. But banks are not always favorable and the reasons include poor credit history, low income or no income, no guarantor and/or no collateral.
If you are like some who never take “no” for an answer, your next option would be to seek private loans. How right your decision could be? Can you look beyond the loan’s immediate purpose and firmly believe that you will not land into any trouble? If unsure, continue reading.
Is Private Lender The Only Solution?
Now that a couple of banks denied your loan, you may begin to believe that getting a private loan is the only chance you have. Before approaching private lenders, consider options like seeking help from family and friends or mortgaging your property. If you are unable to mobilize funds through other sources, you may then find a private lender for your loan needs.
Who Is A Private Lender?
Private lenders are non-banking lenders. They are not necessarily individuals. Private institutions offer both types of loans – with or without security. Unlike in banks, the qualification requirements of borrowers are flexible with private lenders.
Why Do You Need A Private Personal Loan?
The reason for seeking private personal loan is the denial by traditional banks. But what causes a personal loan need? Some of the factors include:
- Emergency in the family
- Home repairs
- Emergency situation in business
- Nearing due date of pending bills
- For debt consolidation
- To promote your business
- A bad credit score
- In between jobs and hence urgent requirement of funds to see through the tough time
Benefits of Availing Loan from Private Lenders
Private lender is not a primary choice with any borrower; it is only the denial at banks that bring them to private lenders. The reason is, of course, the higher interest rate charged by private lenders. Still, why should you go to them?
- If no loan negatively affects progress be it n your business or personal life, a private loan is one of the few best options as it does not halt the progress.
- Quick processing and funds are available within 24 hours.
- Minimal qualification requirements for borrowers
- Credit score does not matter as much as it does with banks.
- Apart from a simple credit check, private lenders never do deep research; your business plan impacts the decision. If you are not into business and looking to borrow money for your personal use, your credit history or your income source may influence the decision of the lender.
- If your loan is a short-termed one, you don’t lose much on the higher interest rates. Though this is not a benefit in the right terms, it certainly minimizes the money spent as interest. The interest you pay for such loans makes you lose sleep and distresses you further.
Cons of Availing Loan from Private Lenders
The cons of private loans include:
- Higher rate of interest
- Shorter loan term if the lender so decides
- Higher pre-payment penalty
How to Choose the Right Private Lender for Your Personal Loan
The extreme scenario in the financial world and its negative impact on the people has turned many into borrowers. The result is the arrival of an endless number of private lenders on the scene. To choose the best is a tough task but taking some efforts ensures you are on the right path.
Before you make your efforts, applying with Nation 21 may be of immense use to you as you will be directed to the right private lenders who are interested in offering you a loan. Nation 21, as you understood from the above line, is not a lender. But it links borrowers to lenders and minimizes the time spent by borrowers in identifying private lenders. Apart from the time saved, it also saves your efforts that may otherwise be wasted in moving in the wrong direction.
The application process is quite simple. All you need to do is to fill in the form in the website of Nation 21. From here, things are taken care of by the firm, which sends your application to the lenders with whom it partners. You will soon be hearing from the lenders and now the choice is yours to make.
Other ways of choosing the right private lender include:
- Private lenders are not only individuals; there are companies too. While looking for companies ensure that they are accredited.
- Don’t go for the first lender that approves your loan. Yes, in some cases, they may be the only one to approve your loan. However, search and search till you have some more options, get quotes, do a thorough analysis starting from interest on a loan to the last term. Make your choice based on the conclusions you arrive at after your full research.
- If any of your friends or colleagues have availed the services of private lenders get their feedback on the services they received to shortlist the lenders you have chosen.
Your loan life can be a boon or bane to you purely based on your decision. Make a wise choice and follow it up with timely repayments to clear your debts.