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Everyone from time to time needs to borrow some money for expenditures that cannot be met by their regular income. However, sometimes borrowing the money you need is not all that simple, especially if you have damaged credit or a bad credit score. At no time in recent history has this rung more true - with the economy in a tumultuous state and banks having to be bailed out by the government, many lenders and loan companies are refusing to loan money to those that need it the most, namely working individuals with real needs.
Overlooked Funding Source
Private lenders are often overlooked as sources to get personal loans or even start up business loans. A private lender is typically thought of as a person or private entity who has the capacity and resources to loan money to those who are in need or people who have a great business idea. A private lender can be an individual, a doctor, lawyer, investor, accountant, or other professional who is tired of investing in stocks, bonds, or other investments and wants to try their hand at private lending.
Your loan from a private lender might be used for such purposes as purchasing a car, truck, SUV, or other vehicle, paying for education for yourself or your children, medical or dental expenses that are unmet by insurance, consolidation of debt, travel including vacations and cruises, purchasing furniture or appliances, remodeling your home, or even starting a business.
Place Money For Fees In Escrow
Your private lender may ask you to pay certain fees to obtain a loan from them. In this case, it is always best to place the money for these fees with an escrow company. An escrow company can hold the money for the private lender until the funds you borrow have been disbursed and then pay the private lender at a time that you designate. This will eliminate your risk of paying fees upfront and then failing to receive your loan.
Have A Clear Purpose
Before approaching the private lender, have a clear purpose outlined in writing of what you plan to use the money for. If you are certain of the purchases that you will make with your loan, have estimates from the furniture store, car dealership, contractor, or travel agent. If you are starting a business, have a precise business loan that you have drawn up that shows the lender how you will succeed with the business that you wish to open - including potential profits that you anticipate making during the first year, five years, etc.
Remember that a loan from a private lender is just like any other loan that you might take out, which means that you must repay the loan. Most private lenders will ask you to place your home or vehicle up for collateral against the private loan. The private lender will place a lien on your property that can only be removed when you have followed the terms of your agreement and repaid the private lender. For these reasons, borrow only the amount that you truly need and be certain to pay on time, every time. |
