Lenders are a group of people, institutions, or an individual that loans money to the borrower for various reasons with an expectation that the borrower will either return the asset or repay the lender with interest.
Here are a few types of lenders when you consider borrowing money or taking loan from an organization or people :-
1. Bank loans- let's cover the obvious ones first. You probably have heard about the lendings from the bank. Banks are a go-to priority for a lot of people when it comes to dealing with money. Banks and credit unions are an advisable choice for:
• personal loans
• auto loans
• home equity loans
• small business loans
2. Peer to peer loan- Sometimes, people can't cope with the heavy documentation and legal requirements bound with bank loans. Peer to peer loan is a safe option for them only if you tie with a reputed lender who isn't involved in frauds and is not looking to take advantage or predate borrowers.
3. Loans from family, friends, and loved ones- sometimes you can make a lender out of a family member or your loved ones, but this can be risky as you have to be careful that it doesn't jeopardize your relationship with them. Money can sour any good relationship. So you need to be very careful and make choices wisely.
4. Specialist (non-banks)-many lenders are available to give loans to people who otherwise won't be eligible. Particularly people who may have some flaw in their credit record. These forms of lendings are usually more expensive than standard loans. The only benefit is that it provides financial assistance to people who otherwise would not have been eligible.