Why Would Someone Choose Private Lenders for a Loan?
When it comes to getting a hassle-free loan, private lenders are the best. Individuals who struggle to get a loan from a traditional bank can take the loan from a private lender effortlessly. Regardless of which private lender you choose, all loan sanction processes are almost similar.
If you ask any real estate investor about getting a loan when you have poor credit for investment, he would most likely give you the advice to go to a private lender. This is because private lenders are generally more liberal in granting loans.
The only downside of getting a loan from private lenders is the interest rates. The interest rates are relatively higher than traditional banks. The reason behind high-interest rates is to offset the risk of repayment; they keep the rates high. However, the credit score of a borrower is not generally that big of an obstacle while getting a loan from a private lender.
How Private Lenders in Tucson work?
Private lenders typically offer a loan to the real estate investors. These loans are used to purchase homes, property, and multifamily buildings. The term ‘private lender’ is a broad term that can be used for anyone who lends you money, traditional banks being an exception. Technically, there are three degrees of private lenders:
- Primary circle: Family and friends
- Secondary circle: Colleagues, professional, and personal acquaintances.
- Third party circle: Accredited investors and hard money lenders.
Are Private Money Lenders right for you?
Predominantly, private money lenders in Tucson are right for both short and long-term loan purposes. We have mentioned below what kinds of people private lenders are right for:
- Fix and Flippers: Individuals who intend to repurpose, renovate, and sell the property within one year.
- Short term loan: Individuals who are looking for small real estate investment.
- Long-term investors: People who can’t qualify for traditional loans.
Private Lenders Loan Eligibility:
Private lenders in Tucson generally standardize their eligibility criteria for private loans. A borrower should see the following eligibility criteria before requesting for a loan:
- A credit score of 550+
- 2-3 Months bank statement.
- Property location and expected purchase price.
- Mostly, there is no set limit when seeking a loan from private lenders
Where to find private lenders?
There are many private lenders in Tucson. You can run a local search, online search, or talk to your family and friends to find some good recommendations. When a private lender has a website, it becomes easier to reach by finding their physical address and contact information. Once you know the private lender is credible, you can go on with the formalities to process the loan.
The third degree private, that is, hard money lenders, have a reliable qualification check and grant the request for your money quickly. When compared to conventional loan providers, private lenders offer you flexible repayment time frame and keep up a professional relationship. They have no hidden costs involved. It’s safe to say that if you’re a real estate investor and looking for capital, you can go to private lenders for a smooth process.