The issue of lending money from the private sector always comes up when your own financial possibilities are exhausted and the banks do not grant a loan because the creditworthiness is not given. The reasons for this can be as different as the people it affects. Some have no work, some have negative private credit checker information, and some are ill or simply earn too little to get a loan from the bank.
Different ways to borrow money
When it comes to smaller amounts that you want to borrow, you can ask relatives or friends who will be happy to help out if they have not been disappointed so far. But even if it is in the family or with friends, a written contract should be made. The contract can be made informal, should contain the borrowed amount and the repayment modalities and should be signed by both partners with the date. So the borrower always has something in hand if the repayment fails to materialize. As is well known, friendship ends with money. That means, maybe it is better from the start not to borrow money from friends, but from someone else’s.
Social lending is on the rise
More and more platforms on the Internet now offer the possibility to borrow money privately. The best known is centiloan, the credit marketplace where lenders and money seekers can be found. The private lending business is booming. Private investors certainly want to make more out of their capital than is currently possible with overnight or fixed deposits. Interest is in the basement, and lending money as a private investor can generate decent returns even in times of low interest rates.
At centiloan, you can borrow money from other private individuals by posting an attractive loan project on the platform for which private lenders develop interest. In the project, the loan seeker has to explain his personal situation and what the money is needed for. Here people borrow money for a trip, money for self-employment, money for a cosmetic operation or just 500 USD for a simple car repair. The private investors are free to decide whether they want to invest in a project or not. The amount that is invested can also be chosen freely. In the end, it is possible for several donors to finance a project. The payment of the loan, the repayment, the credit check and other formalities are carried out by centiloan, which works with a bank.
Borrowing money privately and the associated benefits
- The loan is for free use
- It is not a bank that decides, but a private investor
- Self-employed people and freelancers also have a good chance of getting credit
- Maturities between 12 and 60 months are possible
- The borrower largely determines the interest rate himself
- Employers and house banks are left out
For people who need a loan that the bank denies them, borrowing money privately can be a recommended alternative. If you are convincing with your project, you will get the money you need quickly and probably drive it cheaper than at a bank.Private investors bear a certain risk. While they cannot lose their money, it is quite possible that their return expectations will not be met if the borrower does not repay their loan.However, the centiloan or trucredit platforms, and as they are all called, would not be as successful if the majority of private donors did not have a good experience.