The demand for loans from private individuals to private individuals has been growing steadily for years. Because quite a few people do not receive a loan from banks due to their personal situation – even if their credit rating is excellent. The alternative is providers on the Internet that bring private lenders and private borrowers together. But security and seriousness also apply there.
The principle of lending money to private individuals
Simply express a loan request and a friendly person transfers the amount – this is not how loans from private individuals to private individuals work. Most providers first check the seeker’s creditworthiness. Similar to energy saving classes, this is divided into different levels. This way, lenders already get an impression of the creditworthiness of private individuals looking for loans when they are informed. This means that loans from private individuals to private individuals offer a high level of security, especially for lenders.
Process of a private loan transaction
Since there are several providers on the Internet that broker loans from private individuals to private individuals, the details of the process of a private lending transaction also differ. However, an ID confirmation of the loan seeker is usually required. Proof of income and a list of expenses must also be provided in order to increase the chances of getting a loan. Often, the requirements for private loans meet the requirements of a bank. However, even those private individuals who are often excluded from banks when granting loans have a good chance of getting a private loan.
Lenders can choose projects
If the ad is online, lenders can now choose one out of the various projects and invest in it. As a rule, a loan is not only covered by one person, but by several. A platform, for example, offers a period of fourteen days for this. This means that loans from private individuals to private individuals remain online for half a month. Borrowers can invest during this time. The money is deposited into an account and cannot be accessed during these fourteen days. Only when the loan amount is complete will the money be paid out.
Fees and Risks
Borrowers usually pay the fees for loans from private individuals to private individuals. Some providers require payment in advance. You should be careful though. If it does not work out with the loan, the amount already paid is gone.