Finding The Right Loans

Personal Money Lenders 101: What You Should Know

31 March 2020

April George

Whether you are in a bind and need a bit of cash or you just need financing to make a small purchase that you don't otherwise have the funds for, a personal money lender may be a big help. These smaller lending organizations are a popular option for American consumers, and, yet, many people do not know a lot about them. Here's a look at a few things to know before taking out a loan through one of these lending services. 

How do personal money lenders differ from other lenders?

Lenders that offer personal loans tend to be less formal than a lot of other lenders. Some people refer to these lenders as finance companies. There are typically a few differences between these lenders and something like a bank, such as: 

• The loan amounts are typically smaller
• Interest rates can be a bit higher 
• Payment terms may be shorter in duration 
• There may not be as much focus on credit rating 

Can you get a loan for a vehicle at a personal money lender?

Most personal money lenders do offer loans for things like vehicles, boats, or RVs. Of course, these loans can be more substantial than just a bit of extra money to use for personal financial needs. Therefore, there can be more stringent requirements. For example, you may have to place property up for collateral to cover the value of the loan and secure the lender's investment.

What will the credit requirements be to get a personal loan?

The credit requirements can vary pretty drastically from one lender to the next. Some companies may offer loans based more on the value of the property you wish to use as collateral. Other lenders may prefer that you have halfway decent credit and stable employment. 

What is the best way to utilize the services of a personal money lender?

This really is a matter of opinion, but there are some advantages to using this kind of loan. For example, you could take out a personal loan instead of getting a payday loan because the interest rates will probably be lower. Or, you could utilize a personal lender to help you either establish some credit and payment history or help to build the credit you already have. For example, someone may take out a small personal loan if their credit score is low because they have no payment history before they buy a home so they can get a better interest rate.

For more information, reach out to a personal money lender in your area.

Share  

Search