What are loans between people for people or P2P loans? They are personal loans and loans for companies that do not come from traditional lenders such as banks, credit unions and financial companies. Instead, you borrow from another person or from various people who are investing their money in the loan that you have taken.
What is P2P Lending?
P2P loans in Brazil are changing the country with their personal loans and financing for micro, small and medium enterprises . In the broadest sense, a loan between people can happen between two people, much like home loans or loans between friends and family. Either person may create a mutually beneficial loan and reimbursement agreement (preferably with a written agreement) to avoid future problems.
Today, P2P loans generally refer to a service distributed on online lending platforms that handles all logistics, both for contractor (borrowers) and for lenders (investors). In addition to providing the agreements, make the payment processing and with sophisticated systems carry out the assessment of the borrower, the peer-to-peer lending platforms facilitate the connection between people.
Online lending platforms between people
Instead of just borrowing from people you know or from your community, you can borrow from people (and organizations) across the country from anywhere in the world. In Brazil we already have a large amount of websites that are making loans between people widely available. Biva and Nexoos are the pioneers, but there are many others – and new lenders appear every day in the world of Fintech companies. To know more about 20 credit companies visit: Here!
Why use loans between people?
You may wonder why you make a loan with a peer to peer lender instead of going into a bank or a traditional financial credit? Simple! The loans between people can help with two of the biggest challenges that borrowers face: cost and approval of the requested loan.
Lower costs : People-to-people loans are usually less expensive than loans available from traditional lenders, including some online financial companies such as Financiero Losango, Crefisa Digital and IbiCred, all online. The application of a loan is usually free, and origination fees tend to be approximately five percent or less in most conventional modes.
Perhaps the most important in these online loans are lower interest rates than overdraft and credit card interest. The most popular lenders offer fixed interest rates so that you have a predictable, monthly and flawless monthly payment.
P2p financing investors do not have the same overhead as the larger retail banks and financials with extensive networks of stores, agencies and representatives, so they pass some of these savings on to borrowers.
How is the Peer to Peer loan approval?
Approval is the easiest : Some lenders only want to work with people who have a clean name and good credit score, but some people can get loans without restrictive and dirty name referrals to consulting company.
They are not all but it is common that some platforms are are willing to work with borrowers who have had problems in the past or who are in the process of building credit for the first time in their lives.
P2P for negatives with restriction and dirty name
However, for those who have credit history, score and punctuation there is a strong tendency to get loans with little more voluminous amounts – that’s right – that credit benefit also happens with P2P lenders as well as in traditional banks and financial institutions.
But in many peer to peer communities, lenders who are interested in working with low-income borrowers or negatives often tend to charge higher interest rates and apply insurance in operations.
Either way, if you need borrowed money and have few credit options, researching on the peer to peer collective lending platforms can provide you with an alternative far beyond what you expect.
Financing and loans between people (P2P) are often (but not always) unsecured loans, so you do not have to pledge any kind of property or vehicle collateral to get the money you borrowed. Good luck!