This absence of credit by financial institutions has been partly due to the private loan. It should also be noted that many people have fully paid and mortgage-free real estate, yet the bank continues to deny them much-needed credit. Because private lenders have the necessary liquidity, they are able to legally and securely grant loans to individuals and companies. It is a profitable business and absolutely regulated by law.
Reasons to invest in private loans
One of the reasons for investing in private loans is that these loans allow many people in need of money to get the credit that will solve a good part of their problems. All this is done in exchange for a return and always with the guarantee of a real property that is free of charges and mortgages, in this way the invested capital is insured and the interests are also all 100%.
Another reason to invest in private loans is the great security that this type of investment offers. Since normally it is not usually lent beyond 20% of the value of the real property that will guarantee the credit, this property must also be free of charges and mortgages and we will be the creditors in the first instance. But first of all, our private loan company will carry out a real-estate and legal viability analysis of the property that will guarantee the credit. An official appraisal is also carried out by an appraisal company that is independent and authorized by the government.
It should be underlined that these loans are always signed before a notary and will be officially registered in those competent bodies such as the property registry.
Guarantees of these credits
Let’s see the location and type in reference to the guarantees of these credits. The properties that we use as collateral for these loans have their origin in various points and localities of the territory. We will not take into account those localities that have populations of less than 25,000 inhabitants and that do not constitute provincial capitals or semi-capitals, although we also examine each specific case.
As for the typology of these properties, they must be flats, premises, houses, etc. It is very strange and in very specific cases we also allow lots or industrial warehouses.
Our philosophy is that it is real estate with a possible and real sale, these virtues provide security, as we have previously said.
Profitability of private loans
The profitability of private loans is another reason to invest in private loans. Our company always operates with profitability percentages that are between 12% and 15% per year . The reasons are as follows: it is an interest that we consider acceptable, seeing and taking into account how the current economic outlook is.
Our mission is to be able to grant individuals and companies cash.
The security that investment provides is one of the most important things and is also a reason to invest in private loans. As we work with a maximum of 15% interest and added to this is the fact that the amount of the property in guarantee is five times higher than the loan we grant; This makes our investments among the safest currently.
Duration of credits between individuals
Let’s see what is the duration of these loans between individuals, it is also an important aspect and one of the reasons to invest in private loans . There are loans ranging from 1 year to 15 years in duration, and the most common is to find credits with an average duration of 5 to 10 years. Also it is necessary to underline the fact that when we invest these amounts of money they will always rent a percentage of 12% or 15% in the whole period that the money that is in the hands of the borrower, also in the credits of five years, is It is normal that after three and a half years the client has already returned the amount. In 10-year-olds, this usually occurs at the fifth grade. This means that during the entire period of time that the loan is in the hands of the client, it will rent a percentage of 12% or 15% of annual interest.
And in most cases, the borrower manages to pay off the credit that has been granted to him in advance; this is almost always due to a change in the client’s situation; it may be that it has left the lists of defaulters or has obtained financing through traditional banking, which has a better payroll, has made a sale or received an inheritance, etc. These are various reasons to invest in private loans. The smallest loan we grant stands at approximately $ 4,800. It should be noted that the expenses are included, these types of disbursements are paid by the particular client who is going to receive the loan and the investor will never do it.
For this reason the investment costs will always be zero dollars for the investor, these extra amounts are paid by the private client and never by the investor.