Private loan lenders include Lima One Capital, Hard Money Bankers and Dominion Financial Services, reports the Baltimore Sun. Borrowers can also access private lenders through organizations such as Real Estate Private Funding and the Lending Club, according to their respective websites. Those seeking information on private student loans should visit FinAid.org.
The Lending Club is an online marketplace that links borrowers and investors, explains its website. The organization offers personal loans of up to $35,000 to qualifying borrowers. In addition, it provides small business loans and medical loans. As of September 2015, the Lending Club had extended loans worth over $13 billion to borrowers who, on average, had FICO scores of 699, annual personal incomes of about $74,000 and 16.2 years of credit history.
The Lending Club operates in a similar way to mutual funds, allowing private lenders to diversify their investments over a wide spectrum of loans, notes its website. To reduce risk, the organization splits loans into $25 units, dubbed notes, which have durations of between 36 and 60 months, depending on the terms of the underlying loans.
Real Estate Private Funding allows private investors to provide commercial hard money, short-term financing, 30-year subprime loans and SBA-backed loans, according to its website.
Private lending expanded after the financial crisis of 2008, filling the gap left by traditional banks, explains the Baltimore Sun. These types of lenders include hard money lenders, who charge high interest rates for short term loans and accept property as collateral, and private lenders, who charge lower interest rates but are more selective about the deals they choose to fund.