Credit without bank
The reasons to look for an alternative to the classic bank loan are manifold. Whether it is the lost trust in the banking system, long-term and bureaucratic processing time and awarding processes, accruing fees, lack of flexibility of the banks, or a questionable credit rating.
Request credit without a bank:
An alternative to a loan from a bank or savings bank is the granting of credit by private individuals. Often one speaks here of a so-called personal loan. But this term is not protected and is therefore also often used by banks, which use it simply to describe a loan to a private person.
So if a loan is needed, the way must not necessarily lead to the bank. Money can also be borrowed from a private person – for example, from friends or relatives or, for example, through special platforms on the Internet that mediate loans from private individuals.
Peer-to-peer lending (P2P lending) is lending from "like to like", i.e. from private to private.
This also includes loans from friends or relatives (Family and Friends model). With a loan from friends or relatives you avoid some bureaucratic hurdles. Repayment modalities such as term, installment amount and interest rates are freely negotiable and it is very likely that the interest rates will be significantly lower or even omitted altogether (social lending). Nevertheless, even a Family and Friends loan is borrowed money that must be repaid.
The basis of such a loan is usually trust and the offer of a realistic repayment arrangement.
Hint:
Despite personal relations, it is advisable to draw up a written contract, which should contain information about the lender and borrower, the loan amount, repayment and interest rate, and the installment amount and term. A contract can be drawn up by a lawyer for a fee or a template can be downloaded from the Internet.
Another possibility of P2P lending is offered by online platforms (marketplace model), whose providers act as intermediaries between lenders, who are private individuals, and borrowers or. Credit seekers act. The principle is similar to an online loan from a credit institution, except that in this case the online loan does not come from the bank, but from private individuals.
The above principle is applied not only from private to private, but also with entrepreneurs as borrowers. This is called peer-to-business lending (P2B lending). Often, small businesses and start-ups are reluctant on the part of banks to grant a loan, so that entrepreneurs also like to resort to the credit of private individuals and thus to appropriate online platforms.
Procedure on online platforms
After the registration on the selected platform a profile with the credit desire is put on. You specify the amount you need, the interest rate at which the loan is to be taken out and the planned term of the loan. It is also useful to describe what you need the loan for, so that investors can get a better picture.
The borrower plans himself. The respective portal has certain risk classifications, on which the height of the interest rate is measured. Higher risk, for example if the income of the loan seeker is low, means higher interest rates. A realistic assessment here increases the chances of a loan from private significantly.
If the conditions offered by the loan seeker are attractive to investors, they can provide an amount for financing in a flexible amount.
When the borrower repays the loan, the investors then share in the interest profit. Thus, credit applications with higher risk also have a chance, as they offer a higher interest rate profit. The platforms can therefore also be worthwhile for credit seekers who have not received a loan from a bank due to a higher risk of default.
Paying off and repaying the loan
With online portals, funding of credit requests is usually done within a few hours. If enough investors are found, the contract documents, in which the loan amount, interest rate, installment amount and term are fixed, can be signed. Subsequently, the loan amount is paid to the customer, who then repays it in fixed monthly installments.
Even with the Family and Friends model, the payout is usually made after the contract is signed. With the repayment one is not bound to regular rates in same height but can vary arbitrarily.
The conditions credit without a bank
Even with the loan from private, the fulfillment of some prerequisites is checked to avoid loan defaults as far as possible. Finally, the portals continue to require investors, which in turn expect certain collateral. Therefore, a regular income, basic creditworthiness and no hard negative features in the Schufa should be present.
The regular income is a prerequisite to be able to get a loan online. Whether the income results from a, for example, just founded self-employment or whether an employment contract is temporary or permanent, is not relevant. So even the less creditworthy for banks customers have a good chance of getting a loan.
The credit platforms thus carry out a so-called scoring for the protection of the investors for the credit assessment. This is done on the basis of liabilities, income, place of residence, collateral, occupation etc. a so-called credit score is determined. Based on this score decides whether and at what conditions a loan is granted. The higher the score, the lower the risk of default, the better the terms of the loan.
Possible disadvantages and dangers
Private lenders are not subject to the consumer protection regulations that exist with banks. Also, there is no regulated procedure to defend themselves in the event of an arbitrary termination of the lender to be able to. The lender can reclaim his loan at any time.
This can happen especially in the Family-and Friends model already because of personal disagreements or disputes. This is a risk that you are not exposed to with bank loans and the marketplace model. Also the reclaim of the loan can become fast the means of pressure.
Whether with loans from relatives or acquaintances or on online lending platforms for private loans, there is a risk that the person who wants to borrow money will pay too high an interest rate. Since only in rare cases can an individual correctly assess their own creditworthiness-related interest rates, as well as supply and demand, a misjudgment can lead to an agreement or the indication of an interest rate that is too high. This is how you end up paying evl. more interest than a bank loan.
Also, it may happen that the loan seeker pays excessive interest to get a loan at all. A loan from private individuals is not always favorable. With a good Schufa and appropriate income are usually offered at a bank good interest conditions. P2P loans are mostly requested by people who do not get any from the bank.
When comparing the credit conditions of platforms with those of banks, the fees incurred by online portals are often not taken into account. In this way, u.a. Early repayment fees or additional handling fees as well as costs for possible loan losses are not included in the calculation. Return debit notes, reminders etc. vary in amount. It is also worthwhile to compare with different providers.
Poor credit rating
In the Family and Friends model, credit checks and scoring are in the background. Here, with a known poor credit rating, interest-free social lending is very likely to be applied to support a friend or relative with a low credit rating.
The situation is different with online platforms. If there is no income or substitute collateral available, a loan is almost impossible. Borrowing with a low Schufa score, on the other hand, is possible, but then affects the interest rate of the loan. In case of hard negative features in the Schufa, i.e. insolvency, affidavit or arrest warrant, no credit will be granted, because in these cases the credit seeker has already indicated that he is insolvent.
Guarantors will i.d.R. not accepted.
However, with small loan amounts and earmarked loans to softened credit conditions may apply. For example, when buying a car, the vehicle can be used as collateral, which increases the credit rating.
Current figures and development (Germany)
In 2016, the transaction volume of P2P money transfers is about 2.132.4 million. EUR., Rising trend. A transaction volume of 5 is prognosticated.486.1 million. EUR in 2020. The current number of users is said to be 12.2 million. are expected to rise to 13.8 million. Users on. These are mostly small loans, which are not granted by banks.
The tendency to Coedlending portals is thus rising, and represents for ever more humans an alternative to the bank credit.