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A private lender is an individual or company that offers loans outside of traditional banks and non-bank lenders. Instead of relying on strict credit checks, private lenders base their lending decisions primarily on security, such as the equity in the borrower’s property or other assets.
Private lending is commonly used when traditional lenders, like banks, may be unwilling or unable to provide financing. These loans are often used for short-term financing needs and can offer more flexibility, although they typically come at a higher cost. Private lenders can be investors, finance firms, or even wealthy individuals who are willing to lend based on the value of the asset, rather than the borrower’s credit history or financial situation.
Private lending typically focuses on short-term loans, but it can also cater to various purposes. Some of the common types of loans offered by private lenders include:
Private lenders serve a wide range of borrowers, including individuals and businesses who need quick, flexible access to funds. Some common borrowers who turn to private lending include:
Private lending can offer significant benefits in certain circumstances, particularly when speed, flexibility, and ease of access are required. Some key advantages include:
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While private lending offers flexibility, it also has its drawbacks. It’s important to understand the disadvantages before pursuing this type of loan:
Private lending can be an excellent option for those who need quick access to funds or have trouble qualifying for traditional loans. However, it is important to weigh the costs (higher interest rates and fees) and risks (using your property as security) before proceeding.
At Zenith, we take a holistic approach to understanding your financial situation. We will carefully assess your needs and find you the most suitable private lender based on your asset position, financial goals, and timeline. Whether you’re a property investor, business owner, or borrower in need of short-term finance, our experienced mortgage brokers can help you navigate the private lending landscape and secure the funds you need.
Yes, not only do private lenders generally have higher interest rates, they also charge loan application fees, establishment fees, valuation fees, and early exit fees, that are normally not applicable with traditional lenders.
Private lenders are not necessarily “better” than banks, but they are a valuable alternative when banks are unable to meet your needs due to strict credit policies or lengthy approval processes. If you need quick access to funds or have specific requirements that banks won’t accommodate, private lenders can be a good option.
At Zenith, our mortgage brokers have access to a comprehensive panel of private lenders and can help you compare loan options to find the best deal based on your individual needs and financial situation. Contact us to explore your private lending options.
Having encountered thousands of different scenarios, our team is well equipped to find you suitable solutions. Having the right mortgage broker by your side is essential to ensure you are getting the absolute best deal for your unique situation.
We understand everyone’s circumstances are different and we take the time to understand you and your goals. We value forming lifelong relationships with all our clients and we are fully committed to adding value every step of the way.
We know that mortgages can sometimes be complex and hard to understand. We focus on simplifying the process for you and we treat your loan as if it were our very own. Let us do what we do best so there’s one less thing for you to worry about.
Partnering with a mortgage broker like Zenith can significantly streamline your home loan journey. We provide expert advice on loan products carefully tailored to your unique financial situation. By handling the legwork, comparing multiple options, managing paperwork, and negotiating better terms, we save you valuable time and help identify potential hidden fees. As we are not tied to any single lender, we can select the best loan for your needs, ensuring you secure the most suitable deal. Additionally, we proactively review your interest rate multiple times per year to ensure you remain on the most competitive rate available, maximising your savings and giving you long-term peace of mind.
Our services are provided at no cost to you. We receive compensation directly from the lender you choose once your loan is settled, ensuring that you can explore your options without incurring any upfront fees.
Each lender has unique criteria and requirements that must be met before they approve a loan. Our team takes the time to thoroughly analyse your credit history, income situation, and the specific strengths and weaknesses of your financial circumstances. This allows us to match you with the most suitable lender and loan package tailored to your needs. Our experienced professionals will provide you with comprehensive information, ensuring you have everything necessary to make an informed decision.
To begin, we’ll work closely with you to understand your goals and objectives. We’ll then gather and review all necessary supporting documents to ensure we have a comprehensive understanding of your situation. Once we have sufficient information to make a personalised recommendation, the next step will depend on the chosen lender’s processing timeline. This can vary from several weeks to a few months, which is why we strongly advise initiating the process as early as possible, especially when it comes to property purchases, where timing can be crucial.
You may not always qualify for financing from a specific bank. After assessing your unique situation, we’ll work to find you the lowest possible interest rate from eligible lenders. While interest rates are important, they’re just one piece of the puzzle. We’ll also help you consider all other fees and features associated with each loan option, ensuring you have a complete understanding of your choices and can make an informed decision that best suits your needs.
Typically, lenders require a minimum deposit of 5% of the property’s purchase price to secure a home loan. However, in some cases, it may be possible to proceed with a lower deposit. Keep in mind that if your deposit is less than 20% of the property’s price, you may need to pay Lenders Mortgage Insurance (LMI), unless you qualify for an LMI waiver. To explore your options and determine the best approach for your situation.
Support for Private Lending