Private Lending

[zz82]

Hi lovely peeps,

I need some advice and I thought to ask the question here.

How do I go about finding a private lender for a personal £78k loan?

I will try to make a long story short - as much as possible!

After years of sacrifices of working hard and putting myself through degree and master, I have a great profession and a make a good living.

However, approximately 5-6 years ago my family (particularly my mother and brother) went through a tough time so I helped them, even though I couldn't really do it at the time.

Now, I find myself with several debts, which I can and continue to repay on time without any problem. However, I do not want to have several debts on my credit files as I feel this will impact my score due to being spread across different lenders. I am afraid that when my mortgage deal comes to an end, it will impact my ability to switch to a better one and I am very worried about it.

As I can afford to pay a higher rate (10% and higher), I would like to borrow from a private lender to put myself in a better position. I feel like I had a tough start in life and worked very hard. Now that things are better, I do not want to do anything to jeopardise my future.

I do not know know how to go about it though. If there is any platform to connect with people specifically for this purpose. All I have been able to find is platform for private business investors.

Thank you :)

I'm afraid I don't know anything about private lending but if you can afford to pay a higher interest rate, can you not overpay your loans to clear them earlier? Have you enquired of your existing lenders about loan consolidation? I don't know anything about this, but I'm with one of the high street banks and they offer this.

You need a peer to peer lending platform. There’s some good info here

www.moneyhelper.org.uk/en/savings/investing/peer-to-peer-lending-what-you-need-to-know

No chance of getting the money back from your family?

But it's the amount not the number of debts that matters although if they're paid off by a private loan I expect this wouldn't appear on your credit file which is what you're trying to achieve?

If you're in a better position now can you pay the debt down as much as possible? It's not normally recommended but would paying the debt off with a remortgage be preferable than paying punitive rates to a private lender, who if they've any sense would require the security of a second charge on your home anyway.

If you borrow from a bank, and are late with a payment, you get extra interest added. If you get into financial difficulties, there are legal ways to handle the debt, with bankruptcy helping to sort out the sutuation. If the same happens with a private lender, and you go bankrupt, they will not write off the debt, and you could end up with broken bones or worse. We have a friend who got into a mess with hus business finance, and borrowed from a local 'businessman'. He now can't get out it. I wouldn't wish his situation on anyone.

I would not go down the private lender route. You risk the debt growing out of control if you are unlucky enough to need to miss a few payments, eg if you are out of work for a few months, or have a financial crisis of your own. I assume they will want something significant as bond for the loan eg your house. You are potentially risking a lot.

Regulated lenders like banks will have proper processes to handle any missed or delayed payments. It will be frustrating if your mortgage rate is higher, but you won't be risking your long term financial security.

If you can afford to pay more, I would pay off more each month to pay your loans off quicker.

As your total loan amount goes down you may be able to take out a lower interest rate loan to pay off the higher interest rate loan.

Figure out a plan for when you can pay off the loans and commit to a mortgage term with that in mind, so you remortgage again when the debt is lower.

Also I'd think carefully about helping family out in future as it has landed you in a pickle.

I agree with overpaying if you can afford it.