An unorthodox loan is defined as a loan that is not obtained through the common lenders or through the common channels. It may be a situation where your income is variable, your purpose for the loan is not conventional, you own a business or a loan is for investment purposes. Since the typical proof of income, tax return, employer reference or account statement likely will not apply to you, there is information that you can use to expand your options for getting a loan.
Who Is the Lender?
The first variable to consider is: Who is the lender? The underlying questions here are: What types of risk are they willing to take and how flexible are they in applying a solution for these risks? The typical lender of choice for people is a bank. Banks are known for being conservative and conventional in their lending practices. Therefore if you have risks that are not standard, you will likely not get the best deal on your loan, or the loan may come at a high cost. The banks should not be ruled out because there are cases where exceptions are made depending on how the loan is approached. Other lenders that are available to you as a borrower are private lenders, smaller institutions or mortgage brokers. Private lenders are lending their own money and may cater to real estate deals or business deals. Smaller institutions like credit unions or smaller banks may not as stringent as the major banks. Mortgage brokers are people that can shop around and find the best deal from among many different lenders, both traditional and non-traditional. If one type of lender is not providing you with a satisfactory loan, try another type of lender.
What Are the Lenders’ Concerns?
Depending on what the money is borrowed for, there are different options available.
The underlying themes in getting a loan for the lender is: Can I trust you the borrower to pay the loan back on time? Is the thing you are borrowing money for valuable over time? What risks are there that the current circumstances will change, putting me at risk? Will I make enough money to make this loan worthwhile? If you can prove that you are able to pay the loan back and the risks are under control, you can obtain a loan a high percentage of the time.