Advantage of having loan from person to person
Compared to the usual loans from banks or banks, credit offers a good alternative from person to person. In fact, this loan is called personal loan, but the term personal loan is also used by credit institutions for the loan to a private person. In order for a loan to become possible from person to person, the interested party must register in a credit exchange.
What is the course of a loan exchange?
At the credit exchange, a person-to-person loan is relatively easy. The prospective creditors register with a credit platform and enter their credit request there. Here, the interested parties must specify the amount of the desired loan and their interest rate. Then private individuals appear as lenders who want to invest their money with this option. The loan requests of the interested parties are checked by private individuals and they can bid on. The prospect can then decide whether to accept the bid. As a rule, a lender pays the sum to the platform, and the platform, then transfers the money to the borrower’s account. An installment has been agreed which will be deducted from the platform of the borrower’s account each month by the platform and will be transferred to the lender. Only one percentage point must give the borrower of the platform, which is why the sum is favorable compared to the processing fees of a bank.
The benefits of the credit from person to person
Both for the lender, as well as for the borrower, the benefits are great. In comparison to the banks, borrowers often receive significantly better terms. The favorable conditions come about because the processing fee is waived. It is also very interesting for the platform that even people with a rather negative work situation or self-employed people have a chance of getting a loan. The lenders achieve a higher return compared to other investment projects. If you can not find a lender who pays the whole amount on the platform, then several lenders can share the loan amount. Each of the lenders thus participates with a smaller sum.
Another form of credit from person to person
The prospect can also borrow money from relatives or friends. Maybe there is someone with relatives or friends who can lend money. Usually no contract is concluded here and no credit bureau is obtained. After the friendship stops with money, a contract should be better closed. The contract should set out the amount, date and names, as well as the repayment arrangements.