Private capital loan: What is it?
Private capital loans are provided by companies that operate differently from banks or financial institutions. So the capital of these companies is private and they use it to offer loans to individuals or companies.
These loans can be similar to business loans, the only difference between them is that business loans can also be granted by banks while private capital loans cannot.
Within these private capital companies we find the general partners who will be in charge of making the decisions since they are experts in finance. And the limited partners who are the people who contribute the capital to these companies in order to obtain benefits.
The differences between a bank loan and a private capital loan are very few, but all of them make it very different. Therefore you will find that depending on your variables it will be better to ask for one type of loan or another.
Requirements for obtaining a private capital loan
In order to qualify for a private capital loan you need to meet a series of requirements. But first you should know that each person is made an individual study and the company is the one that decides whether or not to give the loan. Each person and situation is different. In addition, the requirements may vary according to the company, but the most common are:
- Having a property in your name (without encumbrances will be better).
- Being of legal age.
- Request an amount that falls between the private lender’s maximum and minimum range.
- If you are in ASNEF or another registry of this type, it will depend on the amount of money owed.
Advantages and disadvantages of a private capital loan
As with any financial product, private capital loans come with a number of advantages and disadvantages.
We will start by looking at the advantages of a private capital loan:
- They are flexible with conditions.
- It can be applied for by people who are in the ASNEF.
- Faster access to money.
Once we have seen the advantages, it is time to take a look at the disadvantages of a private capital loan:
- They are not guaranteed or regulated by the Bank of Spain.
- Shorter amortization period.
- Generally, it requires a real estate guarantee.
- Interest rates are higher than what a bank can offer.
Before deciding on any financial product, in this case a private capital loan, you have to weigh the pros and cons that it will entail. Remember that today there are many alternatives and options available. Study your situation and assess what you really need.
Are there private capital loans without guarantor?
- The same is true in this case. Of course you can ask for a private capital loan without a guarantor, but you will have to demonstrate with another type of guarantees that you will be able to take charge of it. For example, another way to demonstrate that you can afford the loan is your paycheck or any other justified source of income that you have on a regular basis, such as a pension or rent.