Banks do vie with one another to extend credit. But they offer loans only to financially healthy customers. Customers who do have a healthy credit history are denied loans by banks. Such people when faced with an emergency find it difficult to raise the required amount.
This is where the private money lenders come in. They offer loans to those customers who do not have a good credit report. Sometimes, these private money lenders lend money even without any collateral security.
Thus private money lenders serve as an alternate source of funds to the people who are in need of money and cater to their short term and emergency needs of funds.
Borrowers who need to borrow funds without collateral security approach these licensed moneylenders.
These unlicensed moneylenders are otherwise known as loan sharks colloquially. They offer loans readily. However, they charge interests ranging from 20% to 1018% per annum. Only desperate customers take loans from them. These moneylenders operate illegally and often resort to violent acts to get their money back.
Thus borrowers who need to borrow loans without the hassles of going through too many formalities and much documentation can always approach licensed moneylenders for their short terms or long term need of funds.
You can get a cash loan on the spot with just a verified credit card. Otherwise, the amount will be deposited in your bank account in a few days. You just have to fill out the application.
Unlike pawnshops or banks even, you are not required to put up your assets as security to get a loan. However, a security will fetch you a lower rate of interest. So even if you don’t have any assets to offer as collateral security, you can still get a loan.
These private moneylenders offer you easy monthly repayment schedule to enable you to pay back the loan at your convenience. Once you get paid or are in a better financial situation, you can pay these loans off and be in the clear.
Thus there are quite a few benefits in approaching private moneylenders for a loan. But make sure that you borrow money only in times of emergency and repay it as soon as possible.