How can I benefit by lending someone money?

If you're alternative is using a credit card or a bank loan, make sure you know the interest rate and fees. Interest rates for credit cards may be as high as 20% or a car loan may be higher than 15%. Family and friends have each other in mind, and will probably charge much less. Additionally, the interest charged on the loan may be in excess of savings rates, which can be as low as 1%. Therefore, both the borrower and the lender can benefit from a private loan transaction.