Private Money Lending is when a private individual desires to deploy their capital as a loan on another asset, typically for another investor who buys investment property to flip or hold.  The funding is secured by real estate just like a bank loan and the "note" dictates the interest rate and length of time the note will last before it needs to be paid back, which is referred to as a balloon payment when the note is due.  The benefit of private lending is attractive interest rates secured by real estate with options for short or long term loans.  Many investors get involved in private money loans to diversify their investing portfolio.