Where Are The Private Loans?
There are many places to find private loans. Many lending institutions offer student loans as private loans. These would be private loans that that might bridge the gap between the federal loans, any scholarships and any income to cover the rest of the tuition that is due for a year or more.
Another form of loan that would be called private is when an individual or a group of individuals have money they can lend in order to make some interest. Generally this type of lender would be a private individual who wants to make a safe loan with little risk to them but still make some money on their money. With interest rates being paid by banks on CDs or other instruments so low, a person may make that money available as a private loan to get a higher interest rate on their money.
Generally the person looking for this type of loan would be perhaps in the real estate business looking to turn over a home that they purchased at a low price then rehabilitated it in order to resell it quickly. If that person has some private money available from a lender at a low interest rate he could buy these houses on a regular basis then turn around and sell them. This way they get a good repayment track record and the private lender will be willing to lend them more money.
Sometimes a private lender or individual is interested in lending money to a business if that business is in R & D, or research and development. A private investor that is interested in lending money for new projects would make a loan that would be considered private to give the company money so it can continue its research. If the company is successful in that project then the private lender would gain a good profit on his investment. This private lender would certainly be willing to lend the company money again as it made a good profit for little work.
Another form of loan that is private would be a loan that you got from your sister or friend. This type of loan would not be reported to any credit reporting agency so no one but the two parties involved in the loan would have any knowledge of the loan. Whether the loan ever gets repaid will also never reported to a credit reporting agency so it would not damage anyones credit.
Some banks of Private Lending Groups but this is not actually a private loan but more a group of the bank that lends money to high wealth individuals at a very good interest rate. These loans are not private in the sense that they are reported to credit reporting agencies. They are also loans that go on the banks books that must meet any bank lending regulatory agencies reporting guidelines. All banks must maintain their loan portfolio so they comply with federal regulatory guidelines or else a bank audit would show the loan as an exception.
by: John Miler
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