Choosing a Private Lending Company Over Banks

Searching the word “loan” creates millions of Internet results, making finding the right information more complicated than ever. Between figuring out where to get a loan and how to qualify, getting a loan can seem like more trouble than it’s worth. Luckily, with a reliable private loan company such as Liberty Lending Group, it doesn’t have to be. One of the first questions that many potential borrowers have is whether a private lending company or a bank is a better solution for their needs. The answer is different for every situation, but, by considering the following factors, you will be able to make a more informed decision.

Private loans are better for those with lower credit scores

While many banks offer lower interest rates and higher loan amounts for borrowers, they also require that consumers have an above average credit score, and are in reliable financial situations. With more than 80 percent of people in the U.S. living in debt, meeting that criteria can be hard. The main benefit of a private lending company is that there is an option for everyone, regardless of their financial history and current situation.

Banks are better for those with more long-term flexibility

An important first step in determining where to get a loan is knowing how much you need, and how soon you need it. If you have great credit and are looking for loans higher than $30,000 for reasons that are not too urgent, the bank may be your best option. Unlike private lenders, which usually offer smaller loans within a few business days upon approval, bank loans have a lengthier application process for larger loans. If you are looking to renovate your home over the next few years, a bank loan may be well suited to you, while a home renovation needing a few thousand dollars to pay off unexpected hospital bills could also be handled with a private lender.

Private loans don’t require collateral

Most of the time, a private lending company will only require a hard credit check and ask a few questions about your financial history for approval. Banks, on the other hand, will usually require collateral on top of doing a credit check. The collateral could be the title to your home or car, investments, savings accounts, or any other valuable assets that you agree the bank can take if you fail to pay your loan back. If your credit score is less than optimal, then you will likely have to offer up significantly more collateral for a bank loan, whereas you could settle for a higher interest rate if you take out a private loan instead.

Bank loans suit more experienced borrowers

Students, recent graduates, and other adults who are trying to get their financial life back on track may find it difficult to get approved for a bank loan. Even if they meet some of the requirements, many banks will require a co-signer and numerous fees on top of the loan amount. These additional expenses may include origination fees, annual fees, application fees, and credit check fees, among others. Those who have stricter budgets who feel the dent in their pockets from an extra $100 expense may want to look to a private company when determining where to get a loan.

Private loans don’t require specificity

Private loans can be acquired for just about anything. Have your eye on a jet ski for next summer’s vacation? Sure thing. Need some extra help moving across the country? Not a problem. Looking to consolidate a couple of outstanding debts? Look no further. Bank loan applications usually require that you not only disclose your financial history, but also demand to know what exactly you plan to use the money for. Private lenders don’t typically care too much about the why, so long as you can make your monthly payments on time. Regardless of how much you need or what you need it for, if you are looking for where to get a loan, a private lender is almost guaranteed to be an appealing option.

Private loans are great for students

When federal funding is just not an option, students can always depend on private lending companies for school loans. Getting a loan from a private company to help with financing school can usually result in having your entire cost of attendance covered, so you don’t have to worry about whether or not you can take classes in the upcoming semesters. Private companies may also offer special discounts for students who make good grades or enroll in automatic payments. Some private student loans are even eligible for special repayment programs so students can limit how much they have to work while in school, and can focus on their studies. It’s nearly impossible for students to qualify for bank loans because they have little to no credit.

For most people, private loans are the best loans

Banks loans are not a bad option, but with the state of today’s economy and the rising debt among individuals in the United States, a private lending company is usually a better option than a bank for loans. Private lending companies usually require little to no collateral or additional fees, can be applied for and approved within a matter of minutes, and are the perfect source of additional income for people who have lower credit scores and students who are pursuing higher education.

Contact Liberty Lending Group today to learn more about private lending companies and get connected with the best option today.

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