We live in a fortunate time in which an average individual has plenty of loan options. On the downside, the many different kinds of loans can be a source of confusion. To help clear out some of the complications, this article will focus on the topic of private money loans.
Private Money Loan – What Is It?
The idea behind the private money loan is easy to understand. Technically, it’s a term to describe a loan that is funded by a private company or individual. This could mean a company that is not regulated by traditional banking or lending laws and regulations. Or, it could be from a wealthy individual.
Since private money loans work outside the traditional rules and regulations, it comes with its own pros and cons. For the borrower, it’s advantageous as there are little strict guidelines or requirements to follow. On the downside, the lender has a greater degree of dictating the interest rates. But generally, as long as everything is within the norms, most private money loans follow the current interest rates.
Advantages Of Private Money Loans
Private money loans have plenty of advantages, which is also one of the reasons why it’s becoming more and more popular. Below are only a few of the benefits of private money loans.
Fewer Requirements
Perhaps the most attractive feature of the private money loan is the minimal requirements and conditions. Generally, banks and traditional lending institutions are required by law to impose requirements and conditions before they can give out a loan. Thus, it’s a lot harder to get a loan approved through traditional means. Since private money loans in California work outside such restrictions, they can provide a loan with significantly fewer requirements. In most cases, a private money loan company will only require proof of billing, payslip, employment certificate, proof of income, and valid IDs. Basically, they simply want to know if you are capable of paying back the loan.
Quick Approval
Another offshoot benefit of working outside the traditional rules and regulations that are governing the lending industry is quick approval. In most cases, loan bank approval will take weeks. With private money loan companies, it may only take twenty-four hours. While there are cases that the evaluation may last a week, it’s still faster than the traditional lending options.
Minimal Credit Checks
Private loan companies are typically not big on credit score history. Perhaps their biggest concern is if you are in a financial state able to repay the loan. Having a job will usually be enough.
Wrapping It All Up
Private money loan is a type of loan that is funded by private companies or individuals. They operate outside the rules and regulations that govern traditional banking. Because of such, they can offer loans with minimal requirements, faster approval, and minimal credit checks.