Having a line of credit at your disposal, even with a bad credit score is a great advantage. Thus, and although this option is often ignored, a private lender has numerous advantages. In this article, we will discuss the advantages of using a private lender for any of your current needs.
1. A private lender asks for less documentation
The biggest advantage of private lender loans is that they request significantly less documentation and requirements than other traditional financing methods, e.g., banks. In fact, most private lenders do not ask for your credit score, which is a major impediment for a large number of people.
Thus, on sites such as Good Life Loan, you simply have to prove that you are of legal age and have a Canadian residence permit, both of which are government requirements. Also, as is common with private financing, they are likely to ask for a certificate of income, which you can request from your employer or through bank statements.
As you can see, these are simple documentations to obtain, so there is a greater chance of being approved for credit by a private lender in Canada.
2. They are the perfect credit for people with bad credit.
As explained above, private lenders rarely ask for credit scores, which is why, nowadays, it is easy to find private lenders for bad credit personal loans. This is because their focus is on the individual’s ability to repay the loan and not their credit history, so they more often require an income report.
With this in mind, private lenders for bad credit personal loans often provide lower loan amounts than a bank, which makes them easier to repay, makes them the perfect choice for emergencies, and is one of the reasons why they rarely look at an individual’s score.
3. Loans are much faster
When we tell you that loans from private lenders are ideal for emergencies, we are not lying. A good private lender, for example, Good Life Loan, authorizes and delivers the amount in less than 24 hours.
Thus, a private lender is usually able to provide financing more quickly than traditional lenders because of what we have already mentioned: they have more flexible requirements and, therefore, a more agile loan approval process.
This is also because a private lender in Canada does not have to adhere to the same guidelines as traditional financing and may have their own criteria, which makes the process much faster. Also, banks often have a large number of applications per day, whereas a private lender has a lower volume of applications and can spend more time on each one.
4. Interest rates are more flexible
Another advantage of loans from a private lender is that their interest rates are more flexible, due to the fact that, as mentioned above, they are not subject to the same strict guidelines as banks. This is beneficial, since you can negotiate favorable interest rates that are tailored to your financial situation and take into account the amount you are requesting.
This flexibility can also be advantageous for borrowers who are unable to obtain financing from traditional lenders due to their credit score or other factors. Private lenders may be more willing to work with the individual’s terms, rather than charging high interest rates as can happen at a bank when you have a bad score.
5. You should not risk your assets
In addition to the benefits listed above, the vast majority of private lender loans will not require your assets as payment insurance for the credit. On some types of credit, especially when dealing with large sums of money and bad credit scores, lenders will require collateral, whether it is your home, vehicle or other asset you may have, in case the individual falls too far behind on payments.
So, a private lender will take care of securing the loan through interest and you will not have to put your property at risk. On the other hand, many people do not have assets that they can offer as collateral, so this is also advantageous for them.
Additionally, private loans that do not require collateral are easier to obtain since the lender does not have to evaluate the value of the assets in order to approve the loan.
6. Free financing for whatever you needs
Another reason why private financing may be a good option for you is that the funds can generally be used for whatever purpose you need them for, since they are more flexible with their conditions.
Among the most common traditional credits are mortgages and car loans, however, these have guidelines that prevent using the funds for purposes other than those established. So, if you need a free sum of money to use for whatever you want, the best option is to go to a private lender.
Help improve your credit score
One of the best strategies to improve your credit score is to consolidate your debts and pay off a good portion of them in a period of less than 6 months. Therefore, a great way is to go to a private lender, whose loan will often not show up on your credit report, and use it to pay off a large portion of your debt.
This way, you can calmly repay the private lender while quickly increasing your credit score in case you want to take out a much larger loan, such as a mortgage, in the future.
In conclusion, loans from private lenders have proven to be really advantageous, so if you want to apply for one, you can enter here. On the other hand, if you want to learn more about personal finance in Canada, you can visit our blog.
How to increase your credit score quickly?