There are a number of factors involved while applying for private loans. People often apply for loans in order to buy the property or invest in some business, but the key is to always find the right means to lend money to not get into trouble later. The lenders are mostly non-institutional creditors. There is a specific term used for these individuals and they are called “hard cash banks.” Private lending has become a proper profession in which private cash advances are offered to people from multiple walks of life to help them buy a property, car, etc. The private lending companies do so while keeping a monetary benefit for themselves as well. Private cash lenders are classified into three main categories: Essential or primary circle, Auxiliary or secondary circle, and Outsider or professional circle. The first includes only family and, or friends as well as companions. The second includes colleagues, proficient and individual associates’ and the third circle include accredited financial specialists and hard cash loan specialists who provide professional help.
Now that the basics about private lending are established, let’s understand what the criterion is:
The base requirement forPrivate Lenders:
What makes private lending so desirable is the fact that it does not require a lot of complications. There are very few restrictions so people tend to consider private lenders more than lending from the banks. Minimum salary, nationality, age, etc. are not the defining factors for qualifying for a loan from a private lender. Due to the minimum documentation work, the loans are processed very quickly in no time. Obviously, borrowers are only going to be those people who need urgent money and the lenders do take advantage of this urgency. The ease of documentation is compensated by charging high-interest rates on shorter tenures with the rates being increased if any payments are delayed. Due to this the repayment amount will be huge.
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As far as UAE is concerned, private lending is an illegal and the lenders and borrowers are equally punishable for such offense. The idea behind charging the borrowers is that they form the basis of this lending ecosystem, as long as they exist, the lending network will continue to expand. Hence by targeting the borrowers, they are essentially dealing with the root cause of the issue. Furthermore, the state is somewhat right in doing so as private lending is a tricky business. The lenders take extensive information from the borrowers and in some cases, it could be their passport too. Borrowers are often threatened if they are not able to pay their loans on time. However, there are some government registered companies that provide loans and follow the rules of the state and their procedure is more managed and documented along with proper criteria for qualifying for a loan.
If you’re really in need, you can apply for a loan in Finance House or Mawarid Finance; these are some finance companies operating in the UAE. Another option is to go for crowdfunding if you’re looking to expand your business and your idea has potential. It’s better to wait a while instead of going to the wrong sources for loans as it causes a lot of complications.