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Tacurong College

Individual
Money Lender
PRESENTED BY
ROSETHEL GRACE B. GALLARDO
Introduction
What is Lender?
Lender
• A lender is an individual, a public or
private group, or a financial
institution that makes funds available
to a person or business with the
expectation that the funds will be
repaid.

• Repayment will include the payment

of any interest or fees.
Types of Lender
 Types of Lender
MORTGAGE SECONDARY
BANKERS AND MARKET LENDERS
BROKERS

• Mortgage bankers are • secondary lenders have

lenders that are large assisted the national
enough to originate loans mortgage market by
and create pools of loans. DIRECT LENDERS allowing money to move
easily from state to state.
• A direct lender loans the
money directly to the
borrower.
Individual Money
Lender
 Individual Money Lender

• Individual Money Lender lends his

surplus to those in need which will
bring some income to him.
• Known as a “loan shark.”
• Neither are borrowers required to
execute promissory notes.
What is a Private
Money Lender?
Private Money
Lender
• A private money lender is an
individual or entity that issues
loans secured by a trust deed and
note to fund a real estate deal or
transaction.

• Private money lenders are

relationship-based lenders.

• At some point, Individual money

lender and private money lender
are the same.
Private Money
Lender
Difference:
• Individual Money Lender
- offers loans at extremely
high interest rates, has strict
terms of collection upon failure,
and generally operates outside
the law
• Private Money Lender
- must follow federal and state
usury laws, and they can be
subjected to banking regulations
as well.
Private Money
Lender
Categorized as follows:

• Primary Circle
- friends and family members

• Secondary Circle
- personal, professional
acquaintances, colleagues

• Third Party Cycle

- hard money lenders and
investors
How Do Loan Shark
Work?
Loan Shark Work • Loan sharks work by providing
the money you have to pay back
by a fixed date, either in full or
through installments.

• A loan shark is an unlicensed

lender who charges interest rates
and fees that are higher than the
legal limits set by the state.
 How to find
Individual Money
Lenders?
Traditionally, you could find them at local
businesses or through word of mouth. Now, you
can also find them online. They typically target
borrowers from low-income areas, especially
those facing a financial emergency.
Disadvantages and
Advantages of Loan
Shark
 ADVANTAGES OF
Disadvantages and LOAN SHARK
Advantages of Loan Shark • These loans make lending and
borrowing easy because of the
reduction in the number of steps for
the process flow.

• The ability of these loans to be

available anywhere across the country
makes them much more accessible for
people.

• For people without a great credit score,

payday loans might be the only way a
loan might be possible.
 DISADVANTAGES OF
Disadvantages and LOAN SHARK
Advantages of Loan Shark • The payment cycles tend to be confusing. They
try to predate on writing rules complicatedly
and the ignorance of people.
• Some payday loans put weekly interest rates,
some put annual, and some days, such
complicated interest rate calculations make it
difficult for the borrower to accurately
calculate the total amount.
• Payday loans are hard to pay off. In fact,
sometimes, it almost becomes impossible to
repay. There are multiple cases where people
have failed to pay back and have been
harassed and, in some cases, violently.
• Since they don’t operate within the boundaries
of government agencies, any legal
complications cannot be handled with a
generic legal system.
• Most of these loans are not reported to credit
rating agencies. This makes a point of these
loans moot. If the credit score of the borrower
is not improved, there is no point in having
taken loans.
 Guess the
Missing Word
 A ________ is an individual, a public or
private group, or a financial institution that
makes funds
Lender
Individual money lenders is known as
__________.
Loan Shark
 A loan shark is an _____________who
charges interest rates and fees that are higher
than the legal limits set by the state.
Unlicensed Lender
 Notre Dame of
Tacurong College Individual Money Lender
P R E S E N T E D B Y: ROSETHEL GRACE B. GALLARDO

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