Borrowing money without the intervention of the bank is becoming increasingly popular. A number of new initiatives bring borrowers and investors together. See http://www.bestgoodonline.com/payday-loan-consolidation-in-texas-how-to-consolidate-payday-loans-with-us/ for a write-up
Anyone who wants to borrow money without going to the bank is quickly dependent on friends and acquaintances. The borrowing standards are often less strict and the borrowing rate can also be lower. However, a private loan also has pitfalls that ensure a cooled or broken relationship. Do you want to borrow from friends or acquaintances? First, read the rules for a private loan.
Peer to peer borrowing
A number of credit services jump in the gap between the private loan and a loan from the bank. They bring borrowers and investors together via an online platform. This is called ‘peer to peer’ borrowing. The borrower can get a loan outside the bank without a personal bond.
Marketplace for loans
Supply and demand come together via an online marketplace for loans. This goes as follows :
- Those who want to borrow money can place a call for a loan.
- The loan amount is collected from investors via the website.
- When the loan amount is together, it is paid to the borrower.
Borrowers can place their advertisement for a loan on the website for free. In addition, a number of documents are requested to check the creditworthiness. Part of the proceeds is deducted as service costs. The investor must take into account costs up to 1% of the proceeds.
Peer-to-peer lending benefits
For the borrower it offers the possibility to take out a loan outside the bank. The interest can thereby compete with the current loan interest. Because they are borrowed anonymously, there is no chance of a bad personal relationship with the lender.
The lender gets a nice return on the investment. This is soon higher than the current savings interest. The interest and the term are known in advance. Because the borrower’s creditworthiness is tested, an estimate of the risk can be made.
Cons peer-to-peer borrowing
A peer to peer loan is not a guarantee of success. A loan with too few investors will ultimately not go ahead. There is also a chance that a loan will not be repaid. If the credit marketplace stops, the loan agreements will also expire.
Platform for borrowing money
The number of initiatives for borrowing money without a bank is growing. The first crowdfunding initiative for mortgages has also been launched. In comparison with the countries around us, the Dutch crowdfunding market is still in its infancy. Below you will find our range of crowdfunding loans. Do you want to invest yourself? Then check out our crowdfunding investing page.