The video provides a few tips for what people should look out for when they are completing private loan applications and going through the process of issuing or getting funds.

One tip that the speaker gives is not to get involved in no-doc loans. No-doc loans may sound like an excellent choice, but they can come back to bite the lender in the behind. A borrower can essentially fail to repay the loan and get away with it if there is no collateral, such as the deed to the home.

Video Source

The lender may then be forced to go after the borrower a different way. The best thing to do is to use a mortgage as security for a private loan.

Investors sometimes miscalculate the time that the borrower will repay the loan as well. That’s something to keep an eye on. Investors should ensure that they consider unexpected emergencies and other situations that might arise. It may be a good idea to add six months to a year when calculating how soon the borrower will repay the loan.

Investors should always be careful not to get left holding the bag. That situation sometimes occurs when doing an investment with more than one other person.