5 Red Flags to Watch Out for When Choosing a Private Lender

1. Vague or Incomplete Loan Terms

🚩 Red Flag: The lender is unclear about interest rates, fees, or repayment schedules—or avoids giving you written documentation.

✅ What to Look For Instead:

A reliable private lender will provide all loan terms upfront, in writing, and take the time to walk you through the numbers. They’ll be transparent about interest rates, duration, fees (including establishment or discharge fees), and any penalties for early repayment or default. If anything is vague or overly complicated—walk away.

2. No Proper Licensing or Accreditation

🚩 Red Flag: The lender cannot verify their registration or doesn’t follow responsible lending guidelines.

✅ What to Look For Instead:

In Australia, most private lenders should hold an Australian Credit Licence (ACL) or be legally exempt. They should comply with the National Consumer Credit Protection Act and other relevant legislation. A credible lender will proudly disclose this on their website or upon request.

3. Pushy or High-Pressure Tactics

🚩 Red Flag: You’re told to “sign today” or are rushed into a deal without time to review or seek legal advice.

✅ What to Look For Instead:

A trustworthy lender understands this is a serious financial decision and gives you time to think, ask questions, and even consult an independent adviser. If a lender is too eager to close quickly without full transparency, it may be a sign they’re hiding something.

4. Unrealistic Promises

🚩 Red Flag: The lender guarantees instant approval, zero risk, or “too good to be true” returns.

✅ What to Look For Instead:

Reputable lenders will be upfront about eligibility criteria and the risks associated with private loans. Every loan carries some level of risk, and honest lenders don’t sugar-coat the process. They assess your ability to repay and won’t approve a loan just to get a signature.

5. No Physical Address or Track Record

🚩 Red Flag: You can’t find a physical office, business history, or credible reviews online.

✅ What to Look For Instead:

Professional lenders have a clear online and offline presence. Look for a physical business address, client testimonials, online reviews, and how long they’ve been operating. They may also belong to professional associations like the Mortgage & Finance Association of Australia (MFAA) or the Finance Brokers Association of Australia (FBAA).

🔐 Trust and Transparency Are Non-Negotiable

At the end of the day, private lending should feel just as secure as borrowing from a traditional bank—if not more so. The key difference is flexibility and speed, not a compromise on clarity or ethics.

If you’re exploring your lending options, take the time to vet the lender just as thoroughly as they assess you. Your financial future is worth protecting.

Looking for a lender who puts transparency and integrity first?

Contact us today to explore tailored private lending solutions built on trust, flexibility, and clear communication.