Lending money from private to private has a tradition as long as there is money. What is new is the possibility that borrowers and lenders can take out a so-called P2P (Peer to Peer) loan via a credit platform or a brokerage platform on the Internet.
A bank makes profits from private investors. There is minimal interest on savings accounts, etc., but the bank lends money to those seeking loans for installment loans, consumer loans, overdrafts, etc. at much higher terms. From these promotions or spreads, the bank draws its returns, but is risky.
Private lenders without Credit Bureau do their business through a credit portal, also with risk, but on much more favorable terms than conventional banks. The borrower has no contact with the lenders, everything is done through the credit marketplace.
P2P loans are usually cheaper than an installment loan from the bank
If you do not get a conventional loan because of a negative Credit Bureau information, private lenders without Credit Bureau offer themselves. It can be assumed that loans can be passed on from private to private with lower agency costs. Of course there are costs for the credit exchange, but these are borne by the investor and the borrower. All in all, these costs are still lower than with a bank loan.
The investor has to bear the risk of default. He has no insight into the Credit Bureau, which could give him credit risk if the borrower has not properly fulfilled his obligations. So since the loans are unsecured, the risk is higher. Of course, the creditworthiness and also the income are checked. In addition, there is usually a diversification, i.e. a diversification, of the loan amounts.
This means that several investors put together smaller sums to finance loans. If the borrower does not pay, the individual loan does not fall on the entire loan amount, but is practically divided.
Explore financial opportunities
If you are in a financial bottleneck or even in an emergency and cannot get a loan because of the bad Credit Bureau information, the P2P – the private lenders without Credit Bureau – is the right choice. Due to the often lacking adequate collateral, the loan amounts are kept rather small. If there is collateral, whether as real assets like real estate or a life insurance, things look different.
Here, the private lender without Credit Bureau has collateral that he will keep if the loan is not paid off. If the monthly income does not meet the expectations of the lender, there is still the possibility to include a guarantor in the contract. The spouse who has sufficient assets can also be included in the loan as security.
Private lenders without Credit Bureau are a solution for anyone who quickly needs a sum of money without Credit Bureau knowing about it. Before you decide to take out a loan in a financial misery, you should first check whether it is really necessary or I just want to afford myself a luxury that I am not currently entitled to. In addition, the monthly cost of living with rents and additional costs should be easy to pay. If this is no longer the case with a loan, private bankruptcy will soon be at home.