Borrowing money from private sources: Private individuals are increasingly turning private loans into an interesting alternative for borrowers. Whether it’s a problematic schufa or simply the need for less bureaucracy, there are many reasons to look beyond banks for classic loans.
A loan from private individuals does not necessarily mean borrowing money from relatives. More and more finance companies are specializing in bringing together private individuals in order to realize loan requests. The principle is quite simple: A potential borrower makes a loan request with a description of what the loan is to be used for and the respective company communicates this request to potential investors.
Borrow money from private for self-employed
Especially self-employed people often have problems getting a loan from a bank. This is mainly because banks are too risky if the prospective borrower does not have a regular salaried job.
By contrast, if the project is given to private individuals for funding, there is a much greater chance that there will be people here who, for example, believe in more daring, innovative business ideas.
Combination of classic and personal loans
One of the most promising solutions is provided by providers such as CreditFer. In principle, a combination of classic and personal loans is offered here. Proposals from potential borrowers are reviewed individually and passed on to lenders with the best chance of good-value financing. So, as a customer, you can be sure you have the best chance of getting a loan, but you do not have to deal with the different providers yourself.
In addition, there are some disadvantages of private loans, because there is a third instance. Of course, contracts must also be negotiated with each other when a loan is given privately, this potentially difficult step does not depend on the borrower, if he is just mediated through an online platform.
Advantages of borrowing money from private
• Also possible without registration in the Schufa
• No problems due to independence
• Generally better financing opportunities
• Often cheaper than traditional bank loans
• Frequently free special repayment possible
Various financing models
It uses all the possibilities offered by the modern credit market. For credit by private is not equal to private credit. There are different models for financing loans, the two most common and important ones being:
P2P funding: P2P is the type of funding described so far. This means that a loan application or loan project is brokered to various individuals in the hope that someone will find the one who will finance the loan.
Funding via crowdfunding: Crowdfunding often works in combination with the first method. As the name implies (Crowd from the English: crowd / crowd) loans are financed here by many people at once, so that the individual usually makes only a relatively small contribution.
Conclusion to borrow money from private
Money via P2P or crowdfunding can make sense for many customers, especially if the chances of the usual way of financing through the bank are poor, regardless of whether due to a weak Schufa score, because you are self-employed or just in the start-up phase of a company