A personal loan from a private lender is one of the most highly sought loan types being offered by financial institutions. Generally featuring shorter approval times and less paperwork than secured loans or home-equity loans, a personal loan from a private lender can give borrowers the cash they need for immediate expenses while still offering flexible repayment terms.
Get a Personal Loan from a Private Lender
Things You'll Need
- Good credit
- Pay check stubs, monthly invoices or other supporting documentation
Collect pay stubs, monthly earnings invoices and any other documentation supporting your employment security. A letter from your company stating how long you've been working there and that your job is on solid ground going forward might also help your case.
Find out your credit score before you head to the bank to speak to a loan officer. Your lender will run a credit check on you when you apply for a personal loan from a private lender. If you know your credit score going in, you can use it as a bargaining chip to try to get a better interest rate (if your credit is good).
Remember that the online personal finance boom has created a highly competitive marketplace for lenders. If you're rejected by a bank or credit union, you can always try your luck online. You might be able to find an online private lender who will approve your application for a personal loan, though you should expect the interest rate and repayment terms to be stricter and less favorable.
Seek a personal loan from a private lender in lieu of a home-equity loan if you're a homeowner. Though the interest rates will be higher, you won't have to pony up your house as collateral. The risk to the bank is greater, which is reflected in the inflated interest rate, but the risk to you is diminished.
Complete the application process as specified by your lender. Each lending institution sets forth its own policies in regards to loan approvals, terms, interest rates and maximum loan amounts. When you're shopping around, consider fees, penalties and repayment terms in addition to the annual percentage rate (APR) of your loan.