Guides / Career guides / Private credit
Private credit: lending without a bank.
Private credit funds lend directly to companies, often those owned by private equity firms. It has been one of the fastest-growing parts of finance, and hires people who can judge whether a loan will be repaid.
Last checked 15 November 2026
Direct lending
Senior loans to mid-sized companies, often to fund buyouts. The focus is on protecting the downside.
Opportunistic and special situations
More complex or riskier lending with higher returns, including rescue financing.
Private credit or private equity?
| Compare | Private credit | Private equity |
|---|---|---|
| What you own | Debt: you are repaid with interest | Equity: you own the company |
| Main question | Will we get our money back? | How much can this company grow in value? |
| Returns | Steadier, with less upside | Higher potential returns and more risk |
| Hours | Usually a little lighter | Long on live deals |
Compensation at large private credit funds is approaching private equity levels.
A typical day in private credit.
A realistic junior day on a normal week. Live deals, results seasons and market shocks make it longer.
- 9:00
Review monthly results from companies in the loan portfolio.
- 10:30
Call with a private equity firm about financing a new buyout.
- 13:00
Build a credit model with downside scenarios.
- 15:00
Write sections of the investment committee memo.
- 18:30
Usually finish in the evening; live deals mean longer days.
The career ladder and pay.
| Level | Typical years | What you do | All-in pay |
|---|---|---|---|
| Analyst | 0 to 2 years | Models, portfolio monitoring, research | $150k to $225k |
| Associate | 2 to 5 years | Credit analysis, memos, due diligence | $225k to $350k |
| Vice president | 5 to 8 years | Leads deals and portfolio companies | $350k to $600k plus carry |
| Principal and managing director | 8+ years | Sources deals and makes lending decisions | $600k+ plus carry |
Approximate all-in pay (base plus bonus) in US dollars at large firms in New York in recent years. London is usually 20 to 30% lower; smaller firms and other cities pay less. Bonuses swing with the market.
How recruiting works.
Most associates come from investment banking, especially leveraged finance and restructuring, or from bank credit teams. Some large funds now hire graduates directly.
Expect a credit case study, often a take-home where you recommend whether to make a loan, and questions on downside protection.
Who hires.
| Type | Examples | What it’s like |
|---|---|---|
| Large alternative asset managers | Blackstone, Apollo, Ares, Blue Owl, HPS, Oaktree | Huge direct lending and credit platforms. |
| Mid-market direct lenders | Golub Capital, Antares, Hayfin, Arcmont | Focused on lending to mid-sized private equity-owned companies. |
| Credit arms of private equity firms | KKR Credit, Carlyle Global Credit, Bain Capital Credit | Credit businesses alongside buyout funds. |
Firm names are examples, not a ranking or an endorsement.
Are you ready to apply?
Tick what you can honestly do today.
Your plan, step by step.
- Before you apply
Build credit skills
Leveraged finance, restructuring or bank credit roles are the best preparation.
- 6 months before
Practise credit cases
Write a one-page loan recommendation on a real company.
- 3 months before
Talk to headhunters and funds
Be clear on the strategy and size of fund you want.
- Interviews
Focus on the downside
Lenders care most about what happens when things go wrong.
Where it leads.
Private equity
Especially at firms with both credit and buyout funds.
Credit hedge funds
Trading credit as well as lending.
Staying in credit
Many people build long careers in private credit as it grows.
Myths and reality.
“Private credit is boring.”
Deals are often complex, and you see every part of a company’s finances.
“It’s only for people who failed to get into private equity.”
Private credit is a large, growing industry in its own right with strong pay.
What to read.
- Private Debt Investor news. Industry news on funds and deals.
- Oaktree memos by Howard Marks. Thinking on credit cycles and risk.
- Quarterly reports of listed business development companies (BDCs). Real portfolios of private loans.
What they ask in private credit interviews.
Expect credit analysis, LBO questions and a case study on a loan.
Credit Walk me through how you’d decide whether to lend to a company.
Look at the business (how stable its revenue is, its competitive position), the numbers (cash flow, leverage, interest cover), the downside (what it is worth if things go wrong) and the terms (security, covenants, pricing). Then decide whether the return is worth the risk.
Credit What is loan-to-value?
The loan amount divided by the value of the company or asset. A lower loan-to-value means more of a cushion before lenders lose money.
Market Why has private credit grown so fast?
Banks pulled back from some lending after the 2008 crisis because of tighter rules, and borrowers value the speed, certainty and flexibility of a single direct lender. Investors like the steady, floating-rate returns.
Technical What happens to a floating-rate loan when interest rates rise?
The interest the borrower pays rises, which is good for the lender’s income but increases the risk the borrower can’t pay.
Case A company has $50m EBITDA and wants a $300m loan. Is that reasonable?
That’s 6 times leverage, which is high. It depends on how stable the cash flow is, how much equity sits below the loan, the interest cost compared with cash flow, and the security and covenants. For a stable software business it may work; for a cyclical one it is probably too much.
The private credit interview prep pack
Every interview question on this page with answers, the readiness checklist and your step-by-step plan, as a printable PDF.
Here it is.
Test yourself: private credit
Questions from the Mandate app. Try each before you open it.
Compared with high-yield bonds, senior secured loans are usually…
Repaid first, at a lower rate. Senior secured debt ranks first and is backed by assets, so it is cheaper.
A revolving credit facility (revolver) works like…
A credit line you can draw, repay and redraw. It is used for working capital and liquidity, often undrawn.
How does a Term Loan B usually differ from a Term Loan A?
TLB is institutional with little amortisation. TLBs dominate leveraged buyouts, with most principal due at maturity.
Most leveraged loans pay interest as…
A floating base rate plus a spread. High-yield bonds, by contrast, are usually fixed rate.
Practise credit questions in the app.
The debt and leveraged finance unit covers leverage, coverage and recoveries.