How does private lending percentages work?

6 Replies

We have a private lender that will be lending to us. we will be giving them 10%. How do we calculate this and figure out how much we will owe them when we are done with our renovation? We are guessing  the project will approximately take  6 months to complete.

simple method.  10% x amount of loan x percentage of year borrowed. If I was loaning you the money, I would also want a kicker. Maybe a 2 or 3% bonus for making the deal.

Straight payment is the easiest one. 10%*loan amount.

To make it simple, if you borrow $100 000, and you get your project done in 6 months (half a year), it would cost you $5000.

100 000 (loan amount)  x 0.10 (interest) × 0.5 (half a year) = 5000

If you would like another option for private lending next time around from someone that would go to extraordinary lengths to make sure you understand the relationship and the numbers, please let me know.

Thank you guys so much for answering my question. I really appreciate the info. Now I understand and can move forward with my deal! 

Originally posted by @Jenny Seaborn :

Thank you guys so much for answering my question. I really appreciate the info. Now I understand and can move forward with my deal! 

 No worries, happy investing !

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