Loans from private to private via the Internet: What should I watch out for?
Would you like to take out a loan from private to private over the Internet? We provide important information about the formalities, costs and fees and everything else that you should consider.
Realized for the first time in Great Britain in 2005, the idea of lending from private to private on the Internet has also conquered numerous other countries. In addition to Japan, Italy and the USA, so-called “social lending” is becoming increasingly popular in Germany. Individuals as individuals borrow money from one another without using the services of banks and professional financial service providers.
Personal loan as an alternative to bank credit
In Germany there are currently several providers of privately arranged loans on the Internet that are rated as serious by consumer portals and Stiftung Warentest. As a rule, loan seekers present their financing project on the respective online placement platform. These can be both the “first car for the son”, the “financing of a course of study” and riskier loan projects. Accordingly, the interest rate is between 1 and 15 percent.
As a rule, the lenders can distribute the amount they have made available to several borrowers in order to minimize default risks. Many Internet platforms for personal loans have their own methods to check the private borrowers in terms of their solvency and their aforementioned projects. For example, members who have repeatedly repaid loans properly are also marked as trustworthy. Protection systems also exist that compensate for the loss through the respective community in the event of a lack of repayment. Failing payments are mostly sold to debt collection companies according to appropriate dunning procedures.
Fees and Expenses
Depending on the placement portal, the costs and fees for a loan vary from private to private. While the registration for some loan brokers is free of charge and a percentage of the loan amount is due for the loan brokerage, other registration and annual fees apply.
The respective conditions for lending are specified by some internet credit intermediaries. However, other portals only serve to establish contact between private borrowers and lenders. In summary, fees may apply for the registration process, the creation of the credit request, the contact and credit mediation as well as creditworthiness assessments.
Conclusion: bank or online credit from private
The criteria for lending a bank to retail customers are often difficult for many people to understand and in some cases prevent borrowing. This can be handled very often with a loan from private to private. Furthermore, interest rates are usually lower than with professional loan providers.
However, with some personal loan providers, registration and hiring fees also apply if there is no private lender. Personal loans are also a good alternative as an investment option, provided that the respective internet portal guarantees appropriate protective measures for the money invested.