Private loan » Private Lending

Look For Pre-Approved Student Loans to Complete Your Financial Package

admin — Mon, 14 Jun 2010 10:35:14 +0000

Once the acceptance letter from a post-secondary school arrives, the real work of determining how to meet the financial obligations to the school and the financial needs of the student begins. Many students look to student aid for that help. Before looking at private lending institutions, each student should complete a FAFSA (Free Application for Federal Student Aid).

Despite generous federal grants and loans combined with scholarships and work-study, many students still need additional help to meet their college expenses. Federal and institutional student aid programs often provide for tuition, books, and fees but only provide a percentage of room and board and other living expenses.

Even students that are well served by their financial aid package can incur unexpected emergencies, such as unexpected travel expenses, field trip opportunities, or day-to day expenses.

Both groups can benefit by a pre-approved student loan. The beauty of the pre-approved student loan is that you may never have to use it. Yet, if you do, it is instantly available.
Pre-approved loans allow the borrower to tailor the amount borrowed to their immediate need. In addition pre-approved student loans usually allow you to fix an interest rate, which can be handy in today’s volatile credit market.

Sources for pre-approved student loans are as close as your bank or credit union. Most banks that offer private student loans also offer pre-approval. In addition, a number of reputable lenders offering pre-approval can be found on the Internet.

In this year’s worldwide credit crunch, it makes sense to get a pre-approval now, for a need that may occur later. The number of private institutions that are offering student loans of any kind is diminishing due to new federal laws tightening the restrictions o student loans.

By: Gerd Cornelius Pacher

No Credit Check Lenders For Loans Over $5000 Dollars

admin — Thu, 27 May 2010 20:33:44 +0000

Are you looking for a personal loan of over $5000? Do you need this loan to have no credit check? There are no credit check lenders for loans over $5000 dollars, but they are not easy to find. Here are some of the better options for you to try when it comes to getting the loan that you need.

Prosper is option number one and they do check credit, but they do not judge you too harshly on your credit. They help match borrowers with private individual lenders that get to read your loan listing and decide whether they want to bid on your loan or not. They can fund the entire loan or just a portion of it. Sometimes you will have a group of people willing to invest a little in your loan and that will add up to your full amount.

Using collateral is your next answer. If you have a paid off car, then a title loan might get you where you need to go and many title loan dealers do not check credit. They check income and the value of your vehicle. They will usually loan up to about 95% of what your vehicle is worth.

You can also get a loan against a piece of property or land and if you do it with the right type of lender they will do a no credit check loan for you. These are usually private lending companies that are a bit harder to find, but they are out there.

Your last option is to find a private lender. This can be done through the classifieds and craigslist. Sometimes you just have to ask around and depending on what you need the no credit check lenders for loans over $5000 dollars for will depend on whether someone is willing to help you or not.

By: Gressly Stevens

When Do Hard Money Commercial Mortgage Loans Make Sense

admin — Sat, 22 May 2010 00:26:43 +0000

Privately funded, often called “hard money” commercial mortgage loans typically carry annual interest rates of more than 10% and charge origination points of 2%-4%. These kinds of rates and terms may seem restrictive, but when the situation calls for it, taking advantage of private lending is a smart business move.

When Time is of the Essence

In the commercial real estate game time truly is money. Experienced property owners, investors and developers will tell you that often speed of execution can trump interest rates and points. When facing a looming purchase option expatriation date, a pending balloon payment that’s coming due fast, an unexpected cost overrun or, worse, a foreclosure scenario business people don’t have time to wait the 60-90 days it can take to close a conventional bank loan. Unfortunately, there are times when your property or you project are on the line and nothing short of quick cash can solve your problem. Hard money lenders can make on-the-spot decisions and can close fast. One week funding is very possible and any legitimate private lender can close almost any deal in less than 3 weeks. Hard money is relatively expensive but it’s a heck-of-a-lot less expensive than losing your deal.

When You Have Credit or Documentation Issues

Conventional lenders will insist on large amounts of documentation and that the borrower(s) have decent credit. To start with, real estate investors must produce 3 years tax records, profit and loss statements, copies of leases, bank statements, building maintenance records and much more. Details will be verified and a deal can be killed because of an “I” that was not dotted or a “T” that was not crossed. Private loans, on-the-other-hand, are usually equity based and not driven by the strength of the borrower. Your credit may not matter at all. Hard money lenders do not have the bureaucracy and the regulations that banks, Wall Street and the insurance companies do. They routinely do deals with minimal documentation, sometimes without even a property appraisal. If your record keeping is in disarray, if you are missing required documents, if you have poor credit or you simply don’t wish to share so much personal financial information, then hard money may be your best (and only) option.

When You Need a Bridge

Private lenders are among the most efficient and professional bridge lenders in the financial services industry. When a commercial property owner or developer finds themselves in need of a bridge loan (short term, interim financing) they are well served turning to private funding sources. Very often bridge loans are used to “bridge” the time gap that can exist between their permanent financing coming on line and their immediate need for cash, such as when they have a closing in days but their bank can’t close their loan for weeks. Bridge loans are also an important method of dealing with construction cost overruns, when a few million dollars can get the project finished and ready for sell-out quickly. There are many situations that call for bridge financing and many private lenders exist for the sole purpose of providing it quickly.

When You Need To Make an Attractive Offer

Cash is still king and having a reliable hard money lender on your team is like money in the bank. If you tell a seller you can close on a prize piece of property in 10 days with all cash, you will get that sellers attention. Your competition is likely asking for a 30 day due diligence period and as-much-as 60 days to close. If you can establish credibility with a dependable private lender and you know what their loan criterion is, you can bid with confidence and the cash to back it up.

There is no denying that private loans are more expensive than conventional loans but consider that they are usually short term and can often make the difference between a deal closing and a deal falling through. A successful commercial development project or a profitable income producing building can make an investor millions over its life cycle. When all factors are considered, and your deal is on the line, hard money can be down-right cheap.

By: Glenn Fydenkevez

Profit From the Power of Ten – Ten Key Benefits of Private Money for Real Estate Investing

admin — Tue, 27 Apr 2010 20:52:54 +0000

Many of us have heard about private money, hard money, and other types of non-traditional funding sources for real estate transactions. It sounds good but you may not be fully aware of all of the benefits that private lending offers to you and your business. With that in mind, I would like to outline the top ten benefits of using private money in your own real estate investment pursuits.

Benefit #1: You are in control!!

The first benefit of private money that I’ll mention is probably the one that is the most important. Private lending gives you far more control over the buying process than afforded by either traditional lenders or even hard money lenders. How often do you get to negotiate things like interest rate with a traditional lender? These rates are generally predetermined and are dictated by your financial strength and/or credit score. Furthermore, the terms of repayment for traditional or hard money loans are rarely negotiable. They know they’re in the driver’s seat (because they’re the ones lending the money and they have clients willing to accept their terms if you choose not to) and pass along that knowledge to you via terms that they dictate. With private lenders, you negotiate the terms of the loan. Granted, the private lender has a say in it but you are in a stronger negotiating position because you are offering an opportunity they might not be able to find elsewhere.

Benefit #2: There is no limit to how much private money you can use on one project.

One of the greatest frustrations in traditional or hard money lending is that of the Loan to Value (LTV). With great credit and a solid income/asset portfolio, you may be able to borrow 100% of the purchase price for a piece of real estate. But what if you have less than perfect credit, limited or “hard to document” income, or desire to purchase land or a commercial property? In these cases, lenders want to see 10, 20, or even as much as 30% down to loan you the balance. This limits your ability to grow your business, even if you’ve found a tremendous bargain that is a sure winner.

Private money does not present the same rigid obstacles. Once again, remember you have the flexibility to negotiate the terms with your lender(s). This means you may borrow enough to fund the entire purchase price of the property if so desired. A private lender will likely want to see how good the investment is first before they will loan this high of a percentage. That is natural and you should be selecting quality investments for your private lenders in the first place. That being said, how cool is it that you can fund 100% of your projects, including repair costs, just by establishing the right relationships with your private lenders?

Benefit #3: Private money is less expensive to borrow.

While interest rates with private lenders may be comparable or slightly higher than with traditional lenders, the absence of third party involvement can dramatically reduce or even eliminate the closing costs and other fees that are normally associated with traditional loans. Furthermore, most private money loans have fixed interest rates and/or are based upon simple interest amortization so you don’t have to worry about floating adjustable interest rates or interest heavy payments in the early stages of a loan. It is also worthwhile to point out that many private lenders will willingly accept either a portion of the profit from the sale of a property or a fixed rate of return upon the sale, effectively eliminating any out of pocket costs during the loan. How many traditional lenders that you are aware of would defer interest payments until you sold a property for a profit?

Benefit #4: Private money is faster than going through banks.

One of the common complaints about traditional lending is that the process proceeds at the lender’s pace. This can mean as much as 30-60 days to close a loan, even if you are in compliance with all the lender’s requests. This amount of time may not seem like a lot but it may mean the difference between securing the deal of the year and not doing so, just by not being able to close quickly enough. In these cases, both you and the seller want to move quickly but traditional lenders will still operate at their own pace, regardless of the urgency at hand. Private lenders can often lend immediately because they have direct access to their own lending capital and thus dictate both when it is used and for what purpose. Once you have established a relationship with a private lender or lenders, you can act on these great bargains and know for sure how quickly you can close, without having to wait on the bank. Remember that a great real estate bargain will look as attractive to a private lender as it does to you so they have incentive to make things happen quickly to cash in on those opportunities you present to them.

Benefit #5: Having a source of cash allows greater flexibility for buying properties at a discount.

You’ve all heard the phrase “Cash is king.” Real estate is a perfect example of this, with the frequency of advertising that offers cash for houses, quick closings, etc. True, cash is a powerful leveraging tool with a seller, particularly one who is highly motivated and needs to sell very quickly. By definition, a cash offer only means that there is not a financing contingency in the contract. It doesn’t mean you have to have the money available yourself. Private money is a perfect example of a readily available source of outside funds. When you have this available to you, you have the confidence and the means to offer cash for some or all of your purchases. Faster closing times and cash purchases should translate into more attractive purchase prices if the seller is properly motivated. Lower purchase prices mean better bargains so this benefit of private money is huge, given its impact on your profit margin for each transaction for which you are able to offer cash.

Benefit #6: There are no lender “seasoning” issues or restrictions on loan amounts with private money.

Many investors are not familiar with lender seasoning issues and the effects these can have on successfully closing transactions. In a nutshell, many lenders will look at a recent purchase and see a sale within a short period of time as a red flag, questioning the ability of the property to have increased in value so quickly. When you offer cash and use private money to fund the purchase, there are no appraisals required, no recent loans issued to compare to, and therefore a bargain remains just what it should be, a bargain. Another lender issue concerns the amount borrowed. Many lenders disallow loans less than a certain amount and you may not be qualified for purchases above a certain amount. Both circumstances can limit you if you are using traditional lending sources or even hard money. The use of private lending removes these issues because the lender is more interested in the rate of return and the quality of the transaction than these other issues.

Benefit #7: Using private money preserves your credit and buying power.

Many investors have solid financial strength and can purchase properties through traditional lending channels. This is true up to a point. Once you purchase a certain number of properties, it can become increasingly difficult to purchase more, even if they all have good equity and are producing monthly positive cash flow. If you plan to purchase many properties, the use of private lenders becomes all the more critical so you don’t hit a wall with your own personal buying power. Another issue to consider on this theme is the impact of multiple purchases on your own personal credit. If you are buying 20 houses per year conventionally, you will have at least 20 credit inquiries, which will reduce your FICO score, even if the impact is brief. Private money requires no credit check and thus removes the proverbial restraints on your purchasing power.

Benefit #8: Using private money makes it easier to run your investment business through your entities.

You’ve probably heard that it is better to run your real estate investments through corporations, LLCs, or other legal entities. This is highly advisable and is all well and good in theory, until traditional lenders and even hard money lenders want to see credit backing a loan. Many lenders are hesitant to issue loans to entities, even if you sign personally as a guarantor on the loan. Since many entities are too new to have a credit rating to back them, most investors must take title to a property personally if they use a traditional funding source. Private money all but eliminates this obstacle and also improves the asset protection aspect of your business. Private money backing means you can offer cash for a property and therefore take title to it any way that you wish. This allows you to keep your investments out of your personal name, which makes more sense for both asset protection and for tax purposes. Additionally, use of an entity like an LLC to purchase a property is a way to secure your private lender’s contribution to the project .

Benefit #9: Private loans require less paperwork!

While the use of private lenders may require some paperwork to make everyone feel secure about the investment opportunity you are presenting, the quantity of paperwork is far less than if you went with another funding route. Cast your mind back to the last time you closed on a traditional mortgage or even a loan through a hard money lender. How many trees were required to produce the stack of paperwork that you had to go through and sign? A small forest, perhaps? These large volumes of paperwork are a necessary evil in the lending business, designed to protect all relevant parties, disclose any number of minute points of interest, etc. etc. The point is that traditional lenders are required by law to have you jump through these hoops. Private lending is not subject to these kinds of laws and restrictions so that means less paperwork for you and your prospective lenders!

Benefit #10: Securing private money gets you in that negotiating frame of mind.

I’ve heard the phrase many times, ‘You don’t get what you deserve, you get what you negotiate.’ This is particularly true in business and especially true when working with private lenders. Negotiation is something of a lost art to many American consumers, as we are socially conditioned to not bargain for things in the same fashion as in other cultures. Think about that. My point here is not to suggest that you are a poor negotiator. Quite the contrary. Negotiation, like any other tool in running a business, is one that can be developed and improved with a little bit of effort. What I’d like to suggest is that you take the time to develop the skills that I know you already possess but maybe just don’t use as often as you could be.

By: Matt Fagerness

Low Interest Student Loans – Your Ticket To Higher Education

admin — Mon, 29 Mar 2010 18:51:10 +0000

There are several factors involved in choosing the best student loan for you, but one of the most critical is that you find the one with the lowest possible interest rate. Low interest educational loans will save you a tremendous amount of money when payback time arrives, both in the total amount they will cost you and in the amount you will have to spend in payments each month.

But fortunately for you, there is no shortage of low cost student fundings available from government and private lending programs. All you need to do is take the time to thoroughly research you options, and you will be happy with the selection of appropriate student aid you find.

Stafford Loans

Your research will undoubtedly uncover the Federal Stafford student loan program, which provides low interest educational funding for both undergraduate and graduate students. The Stafford loan is one of the most popular, because it provides subsidized interest to low income students. If you qualify, the Federal government will actually pay the interest on your Stafford loan as long as you remain in school, during any periods when you must defer your payments for good reason, and during the post-graduation grace period you will have before beginning your payments.

For students with adequate incomes, there are non-subsidized Stafford loans on which the students are responsible for paying both the principal and accumulated interest, but again the payments will not be due until after graduation.

Stafford loans are cheap loans offered at a fixed 6.8% , and by taking advantage of the program’s borrower benefits, you may be able to lower your individual rate up to as little as 4.8%. You may also be able to defer your payments for a full nine months from the time you leave school, giving you plenty of time to find a job and begin earning a good income. And there are no credit checks required for those applying for Stafford loans.

FinAid

An alternative source of cheap funding comes from FinAid, a public service company started in 1994 which has become North America’s premiere student financial assistance. FinAid has a comprehensive group of loans, and can help you find a great low rate student loan to meet all your educational costs not covered by grants, scholarships, or work-study programs.

You can use of FinAid’s loan calculators to compare different loans, getting an idea of what the monthly payments on each will be, and a clearer picture of the amount of debt you can safely assume.

Know Your Limits

While low interest educational loans can indeed be your ticket to higher education, you should realize in advance that they are not free tickets, and your failure to repay them on time will have long-term negative consequences on your financial future. Not only with failure to repay a student loan decimate your credit rating; it will very likely have you targeted by collection agencies.

So when you are choosing your cheap student loans, you should never borrow more than you can comfortably afford to repay. Be smart, and as soon as you have a job after graduating, set aside some of your salary so that when your payment grace period is up, you’ll have the cash on hand to meet your first few monthly payments without trouble. It will be one of the best habits you ever develop!

By: Wade Robins

Home Loan Options When You Have a Small Down Payment

admin — Sat, 27 Feb 2010 22:39:02 +0000

Sometimes coming up with the cash for a down payment is the hardest part of any real estate purchase, especially for young couples entering the market for the first time. However, there are mortgages that let you put up a minimal down payment and get into housing. In this article, we’ll cover PMI mortgages, VA mortgages, FHA mortgages and FmHA home loans. Keep reading to learn how you can break down the down payment barrier.

1. PMI (Private Mortgage Insurance) Mortgages

If you can’t come up with a 20 percent down payment, your lender may offer you what’s called private mortgage insurance. Since your lender is taking on a greater risk, you will pay for extra insurance on that risk until you’ve built up enough equity in the home to hit that 20 percent marker.

If you go this route, keep an eye on your equity and principle balance so you don’t keep paying PMI after you’ve hit your equity marker.

2. Federal Housing Administration (FHA) Mortgages

The Federal Housing Administration (FHA) is an agency of the US Department of Housing and Urban Development (HUD). They help prospective homeowners through a program that insures private loans with down payments as low as 3 percent.

The actual money for the mortgage comes from a private lending institution, not the government, so you need to find a lender in your area that offers FHA mortgages. FHA maximum loan amounts will vary by region and country, but they tend to range between $172,000 and $400,000 for single-family homes.

3. Veterans’ Affairs (VA) Loans

VA loans are given to members of the armed forces, veterans or widows of veterans. The most attractive element of the VA loan is that no down payment is required whatsoever.

While the money still comes from a private lender, the Department of Veterans Affairs contributes by guaranteeing the loan at no cost to the veteran. To qualify, a veteran must have a discharge that is “other than dishonorable” and meet specific service duration requirements.

4. Farmers Home Administration (FmHA) Loans

In rural and farming areas, the Farmers Home Administration (FmHA) sometimes provides direct mortgages. If your income is low and falls within a specific limit requirement, you can use these mortgages to purchase a modest home on less than one acre of property with interest rates that are affordable and set according to your income.

This program is intended for rural buyers who can’t obtain financing elsewhere, and the money is distributed locally every quarter. Prospective homeowners should contact their local FmHA office for details.

By: Ray Tolley

Private Lending – The Do’s and Don’ts of Private Lending

admin — Tue, 09 Feb 2010 01:40:03 +0000

Private Lending Topic – I have received a number of email questions recently on very similar issues and thought I would address them as a group versus individual emails. The questions are broken down into general areas and include things to do and things not to do. The Don’ts include advertising on Craig’s List and the use of the word “Guarantee”. The Do’s include what are the best marketing methods. My comments on each are below….

Don’ts

Private Lending Advertising on Craig List – I do not recommend that you advertise on Craig List. It is too public and there are state and federal watchdogs looking for people who may be violating securities rules. I have said on many occasions that I do not recommend any advertising that is on a national scale including your own web site. This kind of advertising will get you into trouble with securities regulators and may be considered a securities offering to the public.

I know this from personal experience. Several years ago a person responded to my Craig’s List ad requesting information about my investment program. After several emails, the individual said he was ready to invest and I directed him to my title company to prepare the appropriate documents. Strangely, I never heard from the individual again after that.

A short time later, I received a “cease and desist” letter from the Pennsylvania Securities and Exchange. The letter had several direct quotes from the emails I had exchanged with this individual. The State did not fine me, but asked that I never advertise on Craig’s List or on my web site. Needless to say, I am complying.

Private Lending Guarantee – Do not use the word “guarantee” in any form in any of your advertising. Do not use the word “guarantee” or ever imply that somehow your investments are “guaranteed”. This is a sure fire way of attracting the attention of the wrong people. You may say your investments are secured by real estate, which is accurate, but do not use the word guaranteed.

Do’s

For Private Lending contacts you should schedule at least one breakfast meeting per week – This simple advice might be the best and almost certain way to attract large amounts of capital. Schedule a breakfast meeting every week with someone who has extra cash available and is interested in your lending program. You will not get everyone to invest, but the chances are you will get enough to support a reasonable real estate buying business. At these meetings, be sure to ask the person for the name of at least one other person they know who might be interested in your programs.

Hand out 5 to 10 business cards per week – Again, this simple but very powerful advice will ensure that you have plenty of people on your prospect list. These are the people you have breakfast meetings or schedule a group meeting with. Everyone you come in contact with may be a potential lender. Do not overlook people just because they do not fit the perfect profile. You would be shocked that people that you would never think of as investors may become one of your best clients.

By: Mike Lautensack

Direct Education Loans – Direct, Low-Cost Funds For Your Studies

admin — Sun, 10 Jan 2010 14:02:11 +0000

Education is the route to a successful future but it can be pretty expensive. While picturing school life or college life, many fail to consider that it is not just the books, hostel fees and tuition fees for which you need money. Miscellaneous purchases have to be made throughout the year; commutation charges, mess fees, computer bills and even recreational activities have to be included in the budget. They cannot be taken lightly. Many aspiring students who cannot afford the total expense on their own have to rely on loans. Private lending companies however tend to charge high interest rates which cause more burdens on you. A direct education loan seems a more affordable option.

Direct education loans are state funded lending programs available for students. It is provided to you or your parents directly from the government without the involvement of a third party. It can be taken no matter what course of study you are pursuing- graduate or undergraduate; vocational, arts, commerce, science or business. Direct education loans cover most of the expenses that may be incurred in an average student’s life:

• Purchase of books and stationery
• Rent/ hostel fees
• Library fees, tuition fees and mess fees
• Medical treatments
• Travel expenses.

Direct education loans provide an amount in the range of £750 to £20,000 per year or a maximum of £65,000 for the whole course. 6 months after the completion of your course, you have to start repaying the loan. Repayment term will depend on the amount that you are borrowing. So, during this grace period, you can utilize the time to look for a job.

Direct education loans are preferable options mainly due to their affordability. You are borrowing from the government funds and so, the interest rates are cheaper than those on student loans provided by private institutions. What’s more, you do not have to provide collateral.

Direct education loans are easy to find. You can take the help of the student loan counselor in your school or college. He will provide you the brochures and reading materials. You can check out the full terms and conditions through these papers and select a viable program.

By: Henry R Bell

Investment Property Loan – How to Finance Real Estate Through Private Mortgage Lenders

admin — Thu, 07 Jan 2010 14:29:47 +0000

When considering financing through a Investment Property Loan, you must first locate a private lender with an interest in your particular real estate venture. Investment Property Loan lenders are ordinary people who are willing and financially able to fund your real estate venture by means of their own assets. You can locate private lenders through networking with others in the business, asking for referrals, or making a public presentation to a group of potential private money lenders.

Assuming you have located the private mortgage lender, you will need to set up a meeting to negotiate the terms of the private mortgage loan. Keep in mind that the private lender you choose can secure funds for you through a commercial institution or through personal assets such as bonds, stocks, or cash. You will want to negotiate terms that will present a win-win situation for both you and the lender.

Financing your real estate deals through a Investment Property Loan is not difficult however; it will involve some simple steps with documentation that will include a Promissory Note, Mortgage, Certificate of Insurance, and a Disclosure Statement. It is also a good idea to consider any federal or state security issues (SEC) which occasionally transpire through the private lending process.

The Promissory Note and the Mortgage document: The Promissory Note and the Mortgage document the terms you have agreed upon with the private lender. The Promissory Note explains in detail the terms in which the lender has agreed to fund your real estate venture as well as the terms you have agreed upon to borrow the money. The Mortgage outlines the terms of your performance as the borrower and generally is filed with your local county office by an attorney to insure that the filing process is done correctly.

Certificate of Insurance: The Certificate of Insurance is obtained from the insurance agency of your choice and should be provided to your private lender. The property insurance should include a title to your lender and a title to you as the borrower. It should also outline the exact terms of coverage with regard to property type and causes of loss such as flood, basic, broad, special, or earthquake.

Disclosure Statement: Use of a Disclosure Statement is always a good idea in a real estate transaction due to the fact that investing involves uncertainty and risks. The Disclosure Statement will outline the risks to your private lender, as well as your plans for use of the property and any possibilities for change during the course of the transaction. This statement acts as assurance that both you and the lender are aware of the possible risks involved before you enter into the real estate transaction.

Federal Regulations: You will want to check the federal regulations as well as those for your particular state with regard to what is termed as issuing a Security. In many cases, when you work with a private lender, it is considered issuing a Security under SEC guidelines. To avoid any problems, you may need to register with your state or federal SEC if you do not fall under certain exemptions.

By: Mike Lautensack

Private Lending – The Best Source For Loans

admin — Sat, 05 Dec 2009 09:58:07 +0000

In difficult economic times, private lending may be your easiest source to obtain the loan you need. You can receive money to start a business, for a new car, to pay off a loan, to pay off credit card debt, for college education or for home refinance. In short, if you have a reason – any reason – to borrow money, private lending may be the best avenue for you to take.

Private lending is also known as person to person lending and in small business as small business financing, factoring, receivables financing, commercial loans or hard money. What differentiates true person to person lending is that the transaction is usually a one on one transaction. It is a transaction made by one person who has excess money to someone who has a need for money.

Person to person loans are nothing new. They have been around since the early Babylonians where ancient tablets have been found detailing the interest rates, collateral and repayment schedules of loans made between two individuals. In today’s world, these types of loans are easier to find by simply typing in your search terms on any of the major search engines.

Lenders, like borrowers, come in all shapes and sizes and each has their own set of expectations and requirements. Some lenders require detailed analyses of your proposal while others require almost no documentation. Most lenders will require at least some documentation so you must be prepared with your income statement, net worth, liabilities, monthly expenses, loan amount request, and the purpose of your loan. Most lenders will also require a credit check and they are required by law to request this of you before they can make a credit check on your credit.

The application process in most cases is much easier than dealing with a bank, the SBA or with any other financial institution; the lenders are not interested in lots of paperwork, they just want to be assured you will be able to pay them back. Some lenders require a processing or application fee, many require you to pay points and some may tack on a few other items you will need to pay for. Look these over carefully as many of these add-on expenses are negotiable. Work with your lender to request these additional expenses be removed.

Fee structures, documentation required, collateral, interest rates and repayment schedules will all vary from lender to lender and from time to time as changes in the economy and financial world dictate. Private lending may be harder to locate in difficult economic times, but the major players will all still be active. Contacting them, filling out their application and paying their initial fees may be all you need to get the money you need into your bank account. Even in these difficult economic times, the money is out there, somewhere, all you have to do is find it.

By: Perry Jones