According to BadCredit.org, roughly a third of Americans have a poor credit score. One of the disadvantages of having poor credit is that it can be difficult to get approved for a loan by a bank or traditional financial institution. This is where private money loans can help.

What are Private Money Loans?

As the term suggests, a private money loan is essentially money you can borrow from a private organization or lender who has financing options to help you make a large purchase. As mentioned, private money loans are usually a viable option for individuals who have been denied credit by traditional financial institutions. Most banks have eligibility requirements that require borrowers to have a certain credit score. They usually deny the application if your credit history is poor to avoid the risk that comes with bad credit borrowers.

Benefits of a Private Money Loan

The most significant benefit of dealing with a private money lender is that they consider more than your credit score when determining if you qualify for credit. For instance, a private money lender will also consider your monthly income and financial liabilities. Keep in mind that there’s a high risk that usually comes with offering loans to people with poor credit.

While it’s possible to find private money loans that come with competitive interest rates, most of them have higher than average rates to offset the risk for the lender. In addition, private money loans are secured, usually by real estate, to reduce the lender’s risk. That said, you may have some flexibility when choosing your loan terms, and this allows you to choose affordable payments that align with your budget. In addition, the financing process is faster, ensuring that you get your money as soon as possible.

How to Apply

There’s always risk involved with private money loans, not just for the lender, but for the borrower as well. As such, it’s important to do your due diligence and only apply with a reputable lender who can set you up with an ideal situation. Be sure to read the fine print before signing on the dotted line so you know exactly what you’re getting into.

Bad credit can happen even to the best of us. Too often, it requires time and patience to repair your credit. In the meantime, you can rely on private money loans to get the extra cash you need. If you would like to apply for a loan with a reputable private money lender, get in touch with us today.