Loan between individuals: credit without a bank.
Borrowing money is much older than the world. Even before the banks were created, the ancient peoples could take out a loan from the village loan shark. For many reasons, credit between individuals is again in great demand. Whether it is to avoid paying bank charges or to get your loan quickly, this solution allows you to benefit from a number of advantages.
Loans between individuals
As you may have guessed, it’s about borrowing money from someone. Either way, it’s not that simple. You will not like the lender to take advantage of your need for funding to claim exorbitant interest from you. In addition, no one wants to lend money to a stranger.
Well, for both parties to benefit from a minimum financial guarantee, a formal contract must be signed. For the borrower and the lender to have a minimum of security, it will be necessary to resolve to declare this loan.
In this area, there are also a lot of scams. By doing some research on the internet, you will be able to find many offers of the loan type between private individual without documentary evidence, special loan zero rate or even urgent private loan.
Some of these formulas (see all) hide scams. Indeed, in the best of cases, the interest rate applied is around 30% but most of the time, the so-called “private lender” who will be called “the big asshole”, will ask you to pay him file fees before getting the money, money you will not see a scam.
Note that by law, even if the individual lender can freely set the rate of credit, he should not abuse the weakness of the borrower, which is why it often happens that loans without banks sometimes end in courts which may require that the rate be reduced to 2.75%.
This is why few people want to lend their money. The risks as a lender but also as a borrower are high.
Why bankless credit?
Usually, one opts for a loan between particular when one does not meet the conditions to contract a loan within a bank. An unemployed person, a person subject to a banking ban or someone who is on file with the National Bank has no other choice than to take out a loan between private individuals.
As we have mentioned many times before, banks assess the financial health of applicants before granting them a loan. When you have no fixed income, when you have already had some repayment problems or when you are over-indebted, financial institutions will refuse all requests.
In this context, what to do when it is absolutely necessary to borrow money. Be careful, rare are the cases where you are in shit and where you also really need a loan.
Well, you have to try to borrow money from an individual. Generally, funds are released very quickly. The lender if it is a relative will not question you “too much” about your finances. He will not ask you to show pay slips or anything. You only need to provide identification. On the other hand, make sure that you can reimburse him, if you don’t want to lose a friend and / or end up in court.
This kind of transaction is based on trust. But, of course, everything will have to be written down to avoid unpleasant surprises. The borrower will have to sign an acknowledgment of debt. This document will allow the creditor to sue you if you do not honor your commitments. In all cases, the funds will be released quickly. This will generally be done at the time of signing the contract.
Seniors also often use a loan between individuals. Seniors may have difficulty obtaining credit from banks. Due to their advanced age (yes, they risk dying at any time according to the banks), the repayment of the loan is not guaranteed.
To take out a loan, they must either find someone to vouch for them or take out credit insurance. In order to avoid all these inconveniences, it is preferable to opt for a credit without a bank, especially when you are over 81 years old (life expectancy in Belgium).
Types of credit between individuals
Usually, when we talk about loans between individuals, we are referring to over-the-counter credit. This is especially the case when you borrow money from a loved one or a family member. In any case, both parties must come to an agreement under no compulsion, otherwise it would be extortion.
Either way, this kind of contract allows the borrower to enjoy more freedom. There are no specific reimbursement procedures. As mentioned above, it depends on the trust that reigns between the two contracting partners. Thus, it is possible to opt for a quarterly or even annual reimbursement.
How to find a professional private lender then?
For a few years, platforms which offer a loan simulation between individuals abound on the internet. The over-the-counter market has developed a lot. So, one can take out this kind of loan with ease. However, there are also many scams. If after filling out a form, the site asks you to pay “application fees”, drop it.
Reliable platforms, do they exist?
Lately, peer to peer lending platforms have been the most reliable. Although this should be a decentralized system, administrators intervene to link private investors and people who need financing. Either way, you can opt for this solution to get a loan from individual to individual.
In this sector, Mozzenno enjoys a very good reputation. To borrow money, you go to the site, you click on “borrow” or “Realize your project” then you will have to do a credit simulation (as usual). Afterwards, you have to fill out a form to request your equity loan, then you will have to finalize the agreement in the coming days. The applied rate is around 5.4%, but you get a small discount if you pay your monthly payments correctly.
Younited also seems to be a reliable platform. However, it is an old bank. Therefore, the people registered are not able to register. In any case, the internet offers you countless possibilities, but you will just have to remain vigilant so as not to be the victim of a scam.