What separates a properly secured private loan from a handshake
A registered charge on title is what makes the loan a mortgage in the legal sense — it gives the lender a claim against the property itself, enforceable the same way a bank's mortgage is, not just a personal promise to repay.
The questions worth asking before funding anything
What's the loan-to-value ratio, and against what appraisal? Is the charge registered before or after funds move? Do I have my own lawyer, separate from the borrower's? A borrower or broker who's in a hurry to skip any of these is the actual risk, not the asset class.
Where the real risk sits
The main exposure in private lending is a borrower default combined with a loan-to-value ratio that leaves no real cushion if the property has to be sold to recover the loan. That's a underwriting discipline problem, not something unique to private versus bank lending.