Compare Private Lenders for Personal Loans

Name: Private Lenders for Personal Loans
Creator: Savvy
Published: 2021-12-16T14:57:49+10:30

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Written by , updated on October 4th, 2023

What are private lenders for personal loans?

Private lenders are a type of financier that can provide you with personal financing. They’re what’s known as non-bank lenders, meaning that they operate privately as an entity and don’t offer the full range of services that a bank does. They can, however, offer the same high amounts of up to $75,000 that larger financial institutions can.

Private lenders can come in all shapes and sizes, but they’re most prominent in Australia in the online space. They can provide a wide variety of services and loan types not limited to personal loans but are often tailored to personal finance broadly. In terms of how they work, personal loans from private lenders function in the same way as any other type of personal loan. However, there are several key benefits that borrowers should note when considering their personal loan options.

Firstly, and perhaps most importantly, private lenders don’t share the same stringent application and eligibility criteria as banks. This means that more people of varying financial situations can be successful in their applications where they otherwise may not have been. Another advantage of these lenders is that they can often offer lower interest rates and fees compared to the big banks, which can save borrowers a substantial amount over their loan term.

What types of loans can I get for my personal needs with private lenders?

You’ll find that you can obtain and utilise personal financing for a variety of purposes with a private lender. They can often centre their business on providing you with efficient and attractive personal loans, but they aren’t limited to just these. Some of the loans on offer to you from private lenders include:

Personal loans

As mentioned, personal loans from private lenders open their eligibility up to a much wider demographic. Bad credit personal loans are available to borrowers who have an imperfect financial history which would otherwise discount them from being eligible for a loan with a big bank. Private lenders can also offer low doc personal loan options for self-employed workers whose payment documentation doesn’t fit the requirements of a traditional loan. These loans allow them to present alternative documentation, such as tax returns, profit and loss and BAS statements in place of payslips. It’s important to note, though, that both of these loans come with higher interest rates and fees and are more restrictive with borrowing amounts.

Because of their comparatively lesser demands when it comes to the processing of applications, secured or unsecured personal loans with private lenders can be turned around more quickly than with a bank. You’ll often see private lenders advertise approval for applications inside one to two business days, which can be incredibly helpful to those who want or need their funds at relatively short notice. Additionally, you may not always get the full choice of options when it comes to repayment structure with bank personal loans, but those with private lenders can almost always be customised to weekly, fortnightly or monthly repayments.

Small personal loans

Also known as cash loans, small personal loans are an alternative source of financing for those looking to receive approval and funds quickly. These loans aren’t offered by banks; they’re solely limited to private lenders specialising in the area. Small personal loans can range anywhere from $300 to $5,000, with loan repayments varying from as little as 16 days up to two years (depending on how much you wish to borrow). Applications are much quicker with these loans, typically only taking a matter of minutes, and you can often receive the cash on the same business day after approval.

Savvy can help connect you with a private cash loan lender through our easy application process. Once you’ve filled out our form, which will take less than five minutes, you’ll receive pre-approval within 60 seconds from one of our lenders. You’ll have to send off the required documents to your lender, who will process quickly and can approve you that same day, with the funds potentially hitting your account by the close of business. It should be noted that these loans come with high accompanying fees which can add up to a significant percentage of the original loan if not paid off promptly.

Business loans

It’s not just personal loans, though: business loans can also be offered by private lenders to provide solutions for business owners looking for financing. It can be difficult to apply successfully for a loan if your business is struggling, has a bad credit score or hasn’t been open for long, but private lenders can help owners in these positions achieve their business goals. Like personal loans, business loans with private lenders are also able to be processed and approved quickly, with a particular emphasis on unsecured business loans for those who don’t have any assets suitable for security on their loan. Unsecured business loans from private lenders are generally capped at around $250,000 to $300,000 and can come with increased interest as a trade-off for the lack of security.

Types of personal loan

Unsecured personal loans

With an unsecured personal loan, you can potentially borrow as much as $75,000 without the need to attach any valuable assets, such as your car, as security. These loans are the most widely available and often the quickest, with same-day approval possible.

Secured personal loans

Secured personal loans, on the other hand, make use of collateral. This lowers your risk profile in the eyes of a lender, potentially lowering your interest rate and expanding your borrowing power beyond what you may be able to get through an unsecured loan.

Variable rate personal loans

Variable interest rates remain open to fluctuation during your term. This means you can benefit from decreasing rates and save on your loan if the market heads in that direction, although you’ll also pay more if rates start rising.

Fixed rate personal loans

Fixed interest rates are locked at the beginning of your loan and remain constant throughout your repayments. This acts as a valuable protection against interest rate increases, as your loan will be unaffected, but you’ll miss out on potential drops as well.

Debt consolidation loans

If you’re paying off multiple debts at the moment, particularly those with high interest (such as credit card debts), consolidating them into one payment can not only make them more convenient to manage but also potentially save you money overall.

Travel loans

Looking to take off on a holiday with your family but want to pay it off at your own speed? Travelling can be expensive, so you can distribute the cost of your next trip over a period you’re more comfortable with by taking out a personal loan to pay for it.

Wedding loans

There are so many costs that go into making your dream wedding a reality, from venue hire to catering to dresses and suits and so much more. By taking out a personal loan, you can start planning the big day you want, even if you can’t pay for it upfront.

Renovation loans

Home improvements are desirable for a range of homeowners to help keep their living space fresh and interesting, not to mention increase its value. You can get past the financial hit of renovations with a personal loan paid in instalments.

Self-employed loans

Personal loans aren’t limited to PAYG employees, though. If you’re running your own business, you can still be approved for financing by submitting tax returns and other alternative documents instead of payslips and utilise your funds however you wish.

Student & education loans

There’s a variety of expenses which come with being a student, ranging from the cost of your courses, textbooks and computer to your accommodation. Taking out a personal loan can make these costs more manageable by spacing them out.

Green loans

Some lenders offer green personal loans, which are designed to be used for energy-efficient appliances and products such as solar panel and air conditioning installation in your home. You can qualify for lower interest rates and fees with this loan.

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Frequently asked questions about private lenders for personal loans?

What private non-bank lenders can I choose from for personal loans?

There’s a variety of options in the private lender space when it comes to personal loans. Two of the main options here are online specialist lenders and peer-to-peer (P2P) lenders, both of which are run privately. While standard online lenders are typically run by a group of people, P2P lenders are essentially individual investors who assess applications and fund them anonymously through a P2P lending service.

Can I still get a good personal loan with a bank?

Yes – there are still plenty of upsides to going with a bank for your personal loan. Even if their rates aren’t quite as low, they can offer a wider range of products and services that may suit your needs, as well as provide extensive customer support which may not be possible with smaller lenders.

How do I compare personal loans from private lenders?

Several factors should inform your decision on which personal loan to go for, including:

Interest rates: reducing your interest rate can make a big difference in the long run
Fees: like interest, fees can add up to a significant amount, so look for lenders willing to waive certain costs
Minimum amount: if you only want a small amount, check ahead of time to ensure you don’t get stuck with more than you need
Loan features: you may look out for extra features such as redraw facilities and flexible repayment options to enhance your repayment experience

What documents do I need for a personal loan with a private lender?

You’ll need documentation relating to the following on your personal loan:

Identification: passports, driver’s licences, citizenship certificate
Financial: credit history, bank statements, existing debts
Employment: proof of income and employment (contracts)

Are private lenders safe for personal loans?

Yes – private lenders are regulated in the same way as big banks, so you won’t be taken advantage of by a reputable lender.

Are private lenders more accessible for personal loans than banks?

Probably not – big banks these days have increased their online presence to rival the larger non-bank lenders, expanding to access through advanced apps and websites. Additionally, online lenders don’t tend to have a physical presence in the form of branches like banks do. All of this is not to say that private lenders aren’t easily accessible, though; being able to receive a loan without leaving your home is one of the most convenient finance situations you can be in.