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A situation that can affect just about every adult person sooner or later in life: for some reason, it is that – the urgent need to borrow. Be it because an urgent repair to house, apartment or even the car is required, an urgent purchase must be made or just somewhere a real bargain lures. If there is a need for additional liquidity, the loan is not far away. Probably the one who can use a www payday loan direct lender from this important source. Needed money – so good.
At least for that clientele that are considered creditworthy from the point of view of a bank, ie have a positive credit rating. But what if the bank refuses to provide the applicant with the required and required loan because of certain credit-worthiness characteristics? If friend and relatives are eligible for a private loan, good advice is expensive.
No – say the operators of so-called peer-to-peer lending platforms, ie platforms on which private lenders and potential loan seekers should come together. Outside of the regular credit market, which is superficially firmly in the hands of banks – or at least seems to be. Peer-to-peer lending platforms promise to broker so-called personal loans, in which it is possible to obtain loans from several lenders, even if the credit rating is on a creditworthy basis. Sounds good, above all simple and a serious alternative to bank credit.
If you look at the arguments of the platform operators, the idea of the “private credit” comes into play:
• Lightning-fast processing – if loan request is financed
If a loan request is fully funded by private lenders, the approved loan will generally be paid out within 24 hours
• Credit with confidence
For many lenders, peer-to-peer loans are seen as a form of investment. The interest in return and the good feeling to have helped often in the first place of lending. Thus, groups of people such as students, the self-employed and retirees have a chance of a positive credit decision on private individuals’ loans.
• Clearly “more open” and more accommodating rating of the credit rating
An advantage in credit from one person to another is therefore the credit check. The examination of the creditworthiness does not have to adhere strictly to the creditworthiness criteria of the banks.
Credit terms for loans from person to person
However, as with banks, when trying to obtain a personal loan or “person to person”, certain basic conditions must be met by the borrower. So also with this credit type the following applies:
– The 18th year must be completed (eligible age)
– Main residence in Germany
– Proof of a minimum income (varies according to Pipecredit platform)
– No hard negative Schufa entries such as enforcement actions and EV
However, pipe lending platform and, most importantly, the difference between this and a bank loan is that it is the ultimate responsibility of the private lender to assess these criteria individually and use them as a basis for lending.
Private Loan: What to Consider?
Basically, for personal loans, it should not be considered an all-round solution to generally existing money problems. Not infrequently, personal loans are also often referred to as loans without Schufa, but this is not correct. While the chances of receiving a personal installment loan from a private person are generally higher on these platforms than a bank’s, private lenders are very concerned about whether a potential borrower presents himself as willing and able to pay off the loan . So, those who are already in serious financial difficulties and have problems repaying their debts should not become active on such platforms out of sheer fairness to potential lenders.
For honest borrowers, however, when using pipe platforms, there are a few rules that must be observed:
– A credit comparison is also a must on Pipe credit platforms and must not be ignored. Although interest rates are offered individually, it is worthwhile, if necessary, to negotiate and use the results of a credit comparison as an argument. The aim should also be a flexible loan financing with favorable interest rates for a personal loan as well.
– A loan from private lenders resembles in the arrangement of the interest rates the model of the credit rating-dependent interest rates with consumer credits of the bank. What it means in plain terms, though, is that if a bank declined for credit reasons people on Pipeplatforms have a higher chance of getting a loan, but also have to reckon with a higher interest rate than the average interest rate.
– Pipe platforms do not offer their services for free, but charge a commission for each successfully brokered loan. This commission is usually included in the final interest rate for personal loans.
Conclusion to the credit of private
Lending from person to person or personal loans have become well established as an alternative to a traditional branch loan from the bank. However, not only does the different platforms compare, but one still has to do to get an overview of the prevailing interest rates and credit offers in the market. Nonetheless, borrowers should make such a loan comparison before they commit themselves in the longer term. In addition, the options of a free special repayment of the balance and installment breaks should also find their way into the credit agreement when taking out a personal loan.