Did you know that investing in private loans is possibly the safest and most profitable investment without comparison to other financial products?
Invest in loans between individuals
The credit closure and the crisis has caused a large number of Spaniards to be unable to access traditional banking to request a loan. And also many of these people, even though they have paid real estate and no mortgage, have the financing vetoed if they do not meet the strict requirements required by the aforementioned traditional banking. It is there that individuals who today have liquidity, can help other individuals in exchange for a return always in a safe, legal and above all profitable way.
What is investing in private loans?
Investing in private loans is offering money loans to people in need of liquidity in exchange for a return and always with the guarantee of a property free of charges or mortgage, so that the invested capital and interests are fully protected and armored.
No more than 30% of the value of the property is loaned as a guarantee and as long as it is free of charges and mortgage, entering as first-rate creditors. For this, the real estate and legal study of the property under guarantee is carried out. In addition to this, an official appraisal is carried out by an independent appraisal company authorized by the state. All the loans are signed before a Notary and officially registered in the competent bodies such as the Property Registry, etc…
Location and type of guarantees
The properties that are guaranteed come from any point of the national territory including islands, discarding all those populations with less than 25,000 inhabitants and that are not provincial capitals or semi-capitals, according to each particular case.
The types of properties must be flats, houses, or premises in the first instance. Rarely and in very exceptional cases are lots allowed.
We have to understand that in general guarantees are accepted that are “easily salable” and with all the security features that we discussed in the first point.
Profitability of private loans
It works at a profitability of between 10% and 12% per year for four simple reasons:
- It is more than enough interest given the current financial investment landscape.
- The mission is to finance individuals and create a financing social work.
- Investment security is the most important thing and the conditions of the mortgage law that limits the interest rate to three times the real value of money must be followed to the letter. The fact of working in this way together with the provision of an amount 4 times less than the property as collateral make these investments the safest on the market.
Duration of loans between individuals
From 1 year to 10 years, being more common than 5 years, although the vast majority of them are canceled before the first 3. It is important to mention that the money invested will always rent at 10% or 12% throughout the period and that in addition, in a 5-year loan, after three and a half years the invested capital has already been recovered. And in the 10-year-old, the fifth year. That implies that while the loan lasts, the money that we do not have and that is still in the borrower’s hands, will rent us at 10-12% annual interest. In addition, in many cases, the borrower cancels said loan beforehand due to a change of situation (exit from the Financial Credit Institution, being able to obtain financing from traditional banks, a higher payroll, a sale, an inheritance, etc…)
Minimum capital to invest
The smallest loan is approximately $ 10,000 with expenses included. These are paid by the individual who receives the loan, not by the investor, which is a clean operation for it. Loans are made from this amount to hundreds of thousands of USD, all depending on the investor profile.
$ 0, the expenses are paid by the individual, not the investor as we have said in the previous point.
Investment for you
Investors with little capital (even for a single operation) are treated with the same affection as large investors with high liquidity capable of dealing with the most bulky operations.
Therefore, personalized investments are created and the capital to be invested in various operations is diversified depending on the amount thereof. With this, diversification is achieved in the amount of the loan and the location and type of the property under guarantee.
If you want information on private loan proposals call us. We will be happy to explain in detail how many questions and queries you have in this regard. We are financial and real estate experts with several years of experience in the private sector.
Request more information here and receive our loan proposals free by email