P2P loans are loans that are made between individuals. Both lenders and borrowers operate as P2P individuals. This form of credit is also known as peer-to-peer or social lending.
P2P credit – what exactly is this?
Characteristic of this type of money lending is the complete or extensive elimination of traditional credit institutions. So this is not the classic bank loan. The advent of P2P loans was reinforced by the Internet. The Internet offers private borrowers and lenders the opportunity to find themselves in dedicated marketplaces.
Marketplace for peer-to-peer loans
Basically, P2P loans can be used by relatives and friends. Thanks to the internet, foreigners have come together for several years now. P2P loans do not necessarily focus on profit-making intent. Partly loans are also granted privately to privately, because the lender wants to support certain projects for a charitable purpose. In order for lenders and borrowers to find each other, various marketplaces for peer-to-peer loans have been set up on the Internet. The lenders lend their money on individual terms. Frequently less fees are incurred than with conventional bank loans. For a P2P loan, the prospect must have a certain credit rating just like a bank loan. The risk of default on loans from private to private is offset by lenders splitting their loan amount into multiple borrowers or lending only a small amount of money. Loans with a very small loan amount are also called microcredits.
P2P loans offer some advantages
In a P2P loan, the social component also plays an important part. The providers of peer-to-peer loans assume that the willingness to repay a loan is greater if the borrower has a personal relationship with the lender. P2P loans offer the advantage for potential creditors that credit applications are often taken into account by persons who can not borrow traditional bank loans. For example, those who are self-employed and have not received credit from the bank can use P2P loans for themselves. A good comparison option for loans from private to private offers Lending Family.