Lots of different people act as money lenders for people needing short term loans. They can be family, friends, banks, investment brokers or mortgage firms. Such loans can also come in the form of payday advances. Many people dislike borrowing money from family or friends, as it can lead to problems. On the one hand, people you know will generally not charge you interest, but on the other hand if you have problems repaying the loan, it can lead to friction and can damage the relationship you have with your friend or family member.

Direct money lenders like banks, will lend you money for a variety of reasons – to purchase a home or car for example, or to set up a small business. Or even just to give you a much needed line of credit if cash is running short. As a borrower you’ll need to provide proof of income and will need to show that you can repay the loan. Most direct money lenders will check your credit rating and this, combined with your income and ability to repay, will determine whether or not your loan is approved. If approved, it will also help determine how much interest you will pay.

Investment brokers lend money in a way that is similar to banks. The difference is that there is no collateral involved, and this is why the interest rates are usually higher. The repayment terms are also usually much shorter than those of regular banks. Generally, money secured from direct money lenders like investment brokers is used to back up an investment. So as a borrower, you’ll usually have to prove that the investment has a good chance of earning a return.

Specialist mortgage firms can help you out with different types of mortgage loans. Again the application process with these direct money lenders is similar to that of a bank loan, and as a borrower you will usually be asked to provide tax returns for at least two years. Your home is used as collateral for the loan and the mortgage firm will be able to customize the loan according to your particular income or credit situation. They may also be able to help you out with the closing costs, adding them to your overall loan repayment.

Payday advance companies have sprung up all across North America. However you may wish to avoid these direct money lenders. In order to get your loan you will have to show proof of income and have a valid photo ID. You will also need to have a checking account. You are then asked to write the company a post dated check for cash.  The payday loan company then advances you the cash you need and holds on to the check until your next payday. It is a short term loan and the interest charged can be very high. For example, if you need $100 in cash, the check you are asked to write could be for as much as $125. This type of loan service can get some people into a continuous cycle of borrowing and repaying, and can lead to tricky situations where they are constantly in debt to payday loan companies.

If you need a loan there are lots of different lenders to choose from, including payday loan providers. Take the time to research your options really well, compare rates and negotiate as much as possible until you are happy with the terms of your loan.