Privately lending is a legal and legitimate investment tool to preserve capital and create passive income on your money. The difference between this type of lending and others is that it is based on secured collateral.

In North America, this is called a ‘mortgage’. A mortgage is a type of loan often used to buy a home or other property. A mortgage allows the lender to take possession of the property if you don't repay the loan on time. The property is the security for the loan. Normally, a mortgage is a large loan and is paid off over an agreed period.

Private lender opportunities exist for both short-term micro-loans, medium-term and long term loans. Under a mortgage, the borrower are responsible for making regular payments to the lender. The payments cover the interest on the loan plus part of the principal (the amount of the loan). When a borrower makes a mortgage payment, the lender uses it first to cover the interest.

In many countries around the world this is a normal practice, but unlike Asia and Middle-East, it is perfectly legal in Canada for a private person to lend money to another individual base on collateral of their property, and earn interest.

Private loans which are secured against property in Canada (after appraisal and due diligence) are a very lucrative way of creating income for the investor and their families.

One important advantage for private lenders in the province of Ontario (Canada) is that if a borrower fails to repay, there are no court proceedings, but rather a power of sale can be initiated if the lender is in first position on the property title. This type of power of sale is a quick and efficient method of recovering the lender’s principal and interest without the tedious bankruptcy and liquidation courts.

In many cases our immigration clients use private lending to create income to pay their children’s international tuitions and expenses in Canada.

You can find out more about private lending with our financial partner. Red Path Financials role is based on proper assessment on all potential deals involving private lending and borrowers. Their job is to filter the good from the bad, and offering healthy opportunities to private lenders while safeguarding their capital and delivering consistent returns. Visit our finance partner website RedPathCommercial.com.