An IRA non recourse loan has multiple benefits for borrowers. It is a private loan but it doesn’t undermine its advantages. It is true that the loan is offered by a private money lender and that the private money lending companies are free to alter their rules. If you compare a private loan with a bank loan, you will find the former to be more beneficial.
Let’s compare a private real estate loan with a bank property loan
Process
Bank: Banks have set procedures for awarding real estate loans. They don’t work in a hurry or speed up the process to award loans. They take time to scrutinize loan applications and awarding loans. Also, banks have strict procedures for real estate funding. Not all borrowers fit into the eligibility criteria of banks. A good number of individuals can’t qualify for bank loans.
Private Lenders: A real estate finance company is known for customer-centric policies. The loan process is simple and quick. For example, you won’t have to fill out lengthy loan forms or worry about tedious paperwork. Private lenders have an advantage. They provide single-window clearance. Your loan application will be scrutinized swiftly and the loan amount will be transferred within a business day.
Interest Rate
Bank: Banks have fixed interest rates for property loans. They provide limited flexibility in choosing rates of interest. If you go to a bank for a real estate loan, you will be offered a limited choice of interest rates. It will limit your options and force you to choose a higher rate of interest.
Private Lenders: Non recourse real estate lenders have flexible interest rates based on the collateral and loan tenure. Most private lenders recommend short-term loans. A private lender can give you more options in choosing a rate of interest for your property loan.
Loan Repayment
Bank: Banks are quite strict with repayments. They want the borrowers to follow the repayment schedule. If you are unable to repay your loan on time, the bank will initiate legal proceedings to recover the loan. Also, your payment history will be reflected in your financial documents.
Private Lender: You can easily repay your IRA non recourse loan with flexible repayment options. You won’t have any difficulty or hassle in clearing your loan on time. A private lender will help in loan repayment by rescheduling the repayment. If you want, you can even quit the deal without affecting your financial record.