The term “loans from private individuals” is becoming more and more common today. Many people associate them mainly with the segment of P2P loans. Not only will we look at him. Our goal is to go through all the options that exist and assess whether they are a good choice or a bad choice.

Private advertising is full of adverts for loan offerings

Private advertising is full of adverts for loan offerings

You can meet them most often on the credit market. You have also recently seen a number of advertisements that clearly attract private loans. They have been actively offered for several years, and their fairness can be made quite a good image mainly because the ad often is nothing but a phone number. According to him, it is very difficult to find out who is lending money. You can find such advertisements:

  • On public notice boards
  • In various advertising newspapers and magazines
  • On online ads

In addition to giving a rather dubious impression, let us not forget the current legislation. This gave non-bank lenders the obligation to fulfill a number of conditions. So it is quite doubtful whether the people who present their offer in this way have fulfilled their obligations. It is equally doubtful whether their offer is truly fair and not just about collecting contacts.

Distinguish providers and providers

Distinguish providers and providers

Although the offer of a loan may at first glance appear to be from a private individual, the reality is quite different. It is important to distinguish whether you are in contact with a real provider or just an intermediary. This can promise a wide range of options, including loans from a private individual. But it also has a number of classic non-banking companies in its portfolio. Throughout the negotiations, he acts to lend you, but in fact, someone else is listed on the contract. And it is the agent who receives the commission. But if it’s not just the biggest reward, it doesn’t have to be the wrong way. You are communicating with one single person who usually has an overview and access to different offers. It can be a way to save time searching for the best and leave this step to someone who knows.

But here too you may encounter a problem. Either the one we mentioned – the broker is mainly commission, or the problem that you came across a real fraudster. You can recognize this by requesting different fees and prepayments. Beware when prompted. It is not unusual for you to pay the money, you will not get the loan, she is so nice and the pleasant person disappears for good.

P2P loans are becoming a clear hit

P2P loans are becoming a clear hit

Let’s take a third example of how private loans can look like. Here we are talking about a very popular option, which also comes to the fore in our country. The so-called P2Ps work effectively abroad, while they are still at the beginning. Meanwhile, it looks like they will go even more in the future. No wonder, as this is a highly recommended option. What are the main reasons?

  • Low interest rate
  • Individual approach
  • Interesting offer of amounts

In practice, this option works quite simply. The applicant and the loan submit an application, which subsequently appears to individual investors. They will decide whether to provide their money or not. And according to possible indicators such as risk, appreciation, or even the reason for the loan application. When he / she lodges the application, the applicant receives a loan. It negotiates and signs the contract with one single entity, repays one installment per month and the subsequent distribution to investors is done automatically. Today, certainly the way we can get a bargain loan with interest comparable in the banking sector. Currently, there are several servers in our market where you can apply for / invest.

Great attention to usurers

Great attention to usurers

While we have recommended the above option, we now come to the one that we definitely cannot recommend. For what reason? It is not profitable at all. The loan shark loan is the worst way possible. This is because usury is associated with very high interest. It is no exception that they are also 100%. The loaned amount is thus refunded several times. In addition to this, there are other harsh conditions in the form of fines and sanctions, or indiscriminate recovery of money. This is one of the reasons why the state is trying to exorcise usury, but it certainly fails as he would like.

The problem of usurers is also given by the target. That is also why they are not able to cast them out so well. A creditworthy client rarely heads for them because he takes a loan from a bank or a non-banking company. On the contrary, a problem client, which no one lends, is looking for opportunities right here. And since many usurers are quite willing, it is clear that these cases may not end well.

What to watch out for when choosing a loan?

How about your family?

How about your family?

Are they private individuals? Yes, they are. And can they lend you money? Yes, they can. This is an option that can be on the edge. Family and friends can be expected to help you and can definitely lend you for free. They will not examine you, they will not want to substantiate anything, and when it comes to documentation, it is sufficient to make a verbal agreement, or just a bill of exchange or similar confirmation. So much for the positives this option can bring.

However, this loan also has its risks, mainly related to the personal level. Have you borrowed a business and are you doing? Count with envy. Do you have problems with repayment? This will undermine your relationship. Are you in constant contact? Then count on throwing out how the other person helped you. In terms of personal relationships, such loans can be very problematic, as many people have already seen. Although they are convenient, but at what price?

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