December 17

What is a Private Lender and is it safe to take out a home loan with them?


About Private Home Loans & Private Lenders…

Australia Private Lender - How To Secure Private Home Loans or Commercial Loans

Private Lending is a fast growing segment within the finance sector that fills an important need when it comes to financing, whether for business or home.

A Private Lender is a specialised lending agency, often backed by a network of individuals with strong financial resources.

An Australia Private Lender is licensed to conduct lending activities within Australia and conforms to general lending practices.

Why Private Lending is important?

Banks and mainstream lenders can provide individuals, businesses and companies in Australia with borrowed funds that can be put to good use.

These funds can help with business liquidity, paying suppliers and business expansion.

For individuals, these borrowed funds could be in the form of mortgages or refinancing, that allows for the purchase of a home or to free up equity from a home that’s already owned.

However, it is often not an easy task to secure a bank loan. Especially if you do not have a good credit history, are in arrears, or simply do not have a strong income statement.

This is where Private Lending comes in.

A Private Lender often does not require as much documentation as the banks would ask for. In fact, many private lenders are quite flexible when it comes to qualifying a borrower.

Private lenders aim to assess borrowers based on individual scenarios, with the goal of achieving a win-win situation between the lender and the borrower.

Due to the risks involved in private lending, a certain level of assessment is still necessary. It’s just not as stringent a set of criteria as what a bank would use.

What you should look out for when considering a private loan from a Private Lender.

Whether you are in Melbourne or Sydney, or anywhere else in Australia, the same applies when it comes to financing.

For people in need of funds, their first consideration would be to borrow from a bank.

Private Home Loans by Private Lenders

However, a high percentage of people find it difficult to secure a bank loan.

This could be due to a variety of reasons ranging from poor credit history, lack of equity, or even poor communication.

The fact is, banks often require an extensive amount of paperwork or documentation in order to approve a loan.

Private Lender on the other hand, would require far less documentation and is often more flexible in terms of assessing risk.

Albeit, the interest rates in private lending is often higher than that of the banks, but this is balanced by a higher loan to value ratio (LVR) and lower approval requirements.

So what must you look out for if you are in the market for a Private Loan?

1. Reputation of the Private Lender

This is perhaps the most important consideration. Although private lending may have had a negative vibe in the past, most private lenders today are licenced and follow acceptable lending practices.

Additionally, most private lenders would also be a member of the private lending associations in their respective States.

However, it is still very important for you to carefully select a trusted lender with a strong reputation, and a proven track record in lending.

One can research on private lenders by looking for online reviews, reviewing their website for professionalism and that they have a proper business structure and contact details.

A very important check is to ensure they have an ACL or Australian Credit Licence number.

2. Communication & Professionalism

The next step is to give them a call or contact them via their website.

It is important to speak to their lending specialist personally, as this allows you to determine their level of professionalism.

Another aspect to look out for is their responsiveness.

When dealing with a private lender, you want a company or team that is responsive, empathetic and professional.

Often, you can tell if a lender is genuinely empathetic and helpful just by speaking to them over the phone or in person.

3. Be Honest & Open

Once you decide on a Private Lender, it is very important that you are honest and open with your them.

Lenders are focused on helping you resolve your problem in the most efficient manner.

They are often able to structure the best private loan package for you if they fully understand your circumstances.

Just be open and honest. Don’t withhold any information, even if it has to do with bad credit history or arrears.

By sharing your full scenario, your lender will be able to propose the best approach to structure your private loan.

Looking for a Trusted Private Lender in Australia?

Australia Private Lender - How To Secure Private Home Loans or Commercial Loans

If you have tried the banks and are unable to secure a loan for your purposes, then private lending may be a viable option for you.

private loan can be safe and secure if you work with the right Private Lender. Follow the advice on this page to research on reputable and trusted private lenders in your State.

Article provided by:

Gryphon Financial.
Trusted National Private Lending Specialist


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