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Private Lending

Top 5 Mistakes to Avoid on Private Lending Loans

What happens when you cannot get a loan from conventional lenders? Most people will turn to private lending loans.

Despite their “less stringent” lending terms and higher interest rates, many borrowers still manage to take a plunge into mistakes that would leave them in a financial tailspin

Brisbane Finance Guru can guide you to the best private lending loans and help you avoid these pitfalls.

Here’s a first step. Below are the top five mistakes you should avoid when taking private lending loans.

Not Knowing the Exact Amount You Want to Borrow

When you don’t know the precise amount you need to borrow, you run the risk of over-borrowing or under borrowing. Both are not good scenarios for you.

Over-borrowing could leave you with disabling monthly repayments that could cripple your business. On the other hand, under borrowing can leave you cash-strapped in the middle of the project and unable to complete it, thus making the repayments frustrating.

In both cases, you could end up unable to service the loan and eventually necessitate the forced closure or repossession of your home.

This need not be the case. Experts at Brisbane Finance Guru, will help you assess your needs, quantify how much you need and cross check it with our loan calculator and match your requirements with what you can safely borrow.

Not Seeking a Pre-Approval before Penning the Contract

Many people rush to make financial commitments before getting pre-approved for a loan. Big mistake!

Before inking the deal on a financial commitment such as purchasing a new property, call our team of experts and get prequalified. It’s quick, simple and you have no obligation to us. What’s more is that it will save you a load of embarrassment and heartache that happens when you commit to a financially demanding deal but have your loan application declined.

Worrying Excessively About the Interest Rate

Private lending loans attract a much higher interest rate than would conventional bank loans. But this is with good reason. The investors seek to adequately cover the risks and offer a quick, less stringent channels for accessing funds.

Private lending loans are best suited for short-term projects which you could complete and repay in less than a year and switch to the traditional, lower interest rate bank loans.

However, this should not deter you from looking for the best private lending loan rates. Call us to give you a comprehensive comparison of loan rates within the Aussie market today.

Ignoring to Clarify Additional Costs, Fees, and Penalties

Before you pen the deal, always double check on the fine print. This is particularly vital with private lending loans.

Remember, once you sign on the dotted line, you cannot claim ignorance, and you have to live to your end of the bargain. Therefore, before you agree to a deal, make sure you clarify the following:

  • What are the applicable fees, additional costs, and penalties?
  • How often do they require repayment?
  • Are there any prepayment penalties?
  • What fees and penalties apply to late payments?

Shout out to our team learn and get a comprehensive view of possible costs, fees and penalties of private lending loans.

Not Evaluating Possible Lenders before Committing

Before you settle on a lender, have you checked them out? Would they serve your interests in the best possible way?

Here are some questions that our team can help you answer as you evaluate the reputation of candidate lenders.

  • Is the lender experienced in the business?
  • What is the lender’s area of specialty?
  • What is the duration of the loan approval process?
  • How flexible are their repayment plans?

You can get the answers to these questions via a simple phone call to Brisbane Finance Guru. You can also have a look at a lender’s website and check out the customer reviews.

To conclude, procuring private lending loans is like entering a business partnership. Be on the lookout for these mistakes and remain committed to your end of the bargain to realize its benefits.