How to find a legitimate money lender for taking out a loan
Money lenders are the persons or groups of people that offer small personal loans with high interest rates. In present economic downtrend, people often need to borrow money to fulfill their financial requirements. With the rising rates of inflation and unemployment, the number of people seeking loans is getting higher. There was time when only banks, credit unions and other financial institutions lend money to the borrowers. But to cope with the mounting numbers of people looking for loans, nowadays, many individual money lenders have come forward to lend money to these people with dire need of money. These money lenders often levy high interest rates on the amount they lend. But if you borrow the money judiciously and purposefully and make sure you pay back the money within stipulated time, then such lenders can be lifesavers for you when you’re badly in need of quick cash.
Benefits of working with money lenders
The key benefit of working with money lenders is that they take much less time to process a loan application and thus disburse a loan. Usually such lenders are private investors who lend their money to the borrowers and make profit by levying higher interest rates on the loan than conventional financial institutions. Apart from individual borrowers, private money lenders lend money to businesses too. Although interest rates charged by these lenders are quite high, yet businesses prefer to deal with them as they ensure fast underwriting process and less paperwork.
How money lenders work
Loans offered by money lenders are different from conventional loans offered by traditional lending institutions such as banks and credit unions. Unlike traditional lenders, private money lenders won’t consider a borrower’s credit profile as a qualifying criterion to issue a loan. But they often charge much higher interest rates than what conventional lenders charge.
Downsides of working with money lenders
The main disadvantage of working with money lenders is that they levy very high interest rates on the loan they give. The interest rates may range between 12% and 18% and sometimes even higher. Because of its expensive nature, you may consider taking out a personal loan from a money lender as the last resort. And even if you borrow such a loan, make sure you borrow it for a short span of time. However, if you have a poor credit profile, then this type of loan can save your life when you have no other option for getting money to handle your financial crisis.
How to get a loan from a private money lender
Money lenders are becoming immensely popular amongst the people, especially with bad credit, seeking cash next day to cope with emergency financial situation as loans offered by such lenders can be easily and quickly obtainable. There are several websites that help people getting loan quotes from different online money lenders for free. After comparing the loan amount and loan terms people can take out a loan from their preferred lender. If your credit profile is not so robust and if you’re facing financial emergency, you may opt for taking out a loan from such a lender. Here are the steps that you may need to follow while applying for a private loan.
Gather important financial documents – This is the first step to obtaining a personal loan from a private money lender. Gather different documents to prove that you have a stable source of income, you’re a citizen of U.S. and you have attained the age of majority. To prove your financial health, you may also use your bank statement, details of 401k plan etc.
Search the Internet – The next step is to browse the Internet to find the list of money lenders that work in your locality. You can also refer to your city’s or town’s Yellow Pages directory. Local telephone directory may also help you serve the purpose.
Contact your regular bank – Even if you have a savings account with good banking history in the bank for many years, then also your bank may not disburse you an instant loan, unless your credit status is good enough. However, the bank personnel may assist you finding a legitimate personal money lender as most banks have partnerships with different private money lenders especially in areas where the bank doesn’t have any representative.
Contact the lender – Now the final steps come in and it is to contact the money lender. Call them or visit their office directly and explain the purpose which you’re seeking the loan for. Unless you can properly explain your financial distress and convince the lender, you may lose the chance the getting a loan from that lender. Once you can convince your lender and he or she approves to lend you money, solicit the loan application and fill out. Don’t provide any wrong information on the loan application. At the same time, make sure you ask in details about the loan terms, interest rates and other applicable fees. Now ask the lender how fast you can expect the feedback on whether or not you will get the loan after you submit the loan application along with required documents. In case of online application, you need to fax the documents.
Get your loan disbursed – Once your application is approved, the lender is likely to call you to inform and directly transfer the fund to your bank savings account. Generally the total process of loan disbursement doesn’t take more than 24 hours to complete.
While dealing with private money lenders, make sure you deal with a legitimate one. Also make sure you pay the loan back in time to avoid paying hundreds of dollars in interests.
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