Private loans are one of the alternatives to banking products. High availability and seemingly attractive conditions mean that more and more people are choosing to use this source of financing. What are the rules for loans from private persons and is it a good method for patching a hole in the budget? Let’s see!
What are private loans?
Private loans are financial support received to both family and friends, as well as strangers. To be able to talk about this form of commitment, one basic condition must be met. The financing entity should have the status of a private, physical or business person. This statement assumes that it can not be a representative of any financial institution or office. Detailed rules for granting financial support have been regulated in the Civil Code. However, they only apply to the situation when it is necessary to draw up a contract and definition issues. This means that by using such a source of financing, both the borrower and the lender get full freedom. They set all the rules between themselves, and the terms of borrowing, such as the interest rate or the form of repayment, may be subject to possible negotiations.
At the same time, it is worth remembering that in the case of non-banking loan companies, we also get a lot of freedom. Each customer has the right to choose the amount and interest of the loan period. Thanks to this, we can adjust the parameters of the loan to its financial situation, which will enable us to avoid potential problems with repayment of the liability.
Non-bank private loan without databases
In the case of a private loan, the criteria for borrowers are determined individually by the creditor. That is why people who do not have the chance to accept the application in the bank very often for this type of financing due to bad credit history or lack of permanent employment or resources to pay off the obligation. Private lenders do not check their clients in debtors’ databases. They are not interested in entries in databases. However, this does not mean that our applications will be accepted indefinitely. If we do not pay our liabilities in a timely manner, we will not receive another loan, and the consequences of inadequate decisions may follow us for years. For many people, in the face of serious financial problems, it will be attractive to be able to receive higher amounts than in a loan company or bank. However, let us remember that along with the value of debt, the risk of problems with the return of receivables on time increases.
Non-bank and private loans – opportunities
Maybe it is worth thinking about a non-bank loan in such a situation, which guarantees a completely online application, and the required formalities are kept to a minimum. If we look well, among the offers of loan companies we will also find a proposal for financial support without checking the debtors’ databases. It happens that the lender verifies its clients in the records, but ultimately the credit history assessment is not a decisive factor in granting the loan or not. When our income indicates the ability to repay the obligation, and the entries do not testify to large financial problems, then we can count on non-bank financial support on attractive terms.
However, if our credit history leaves much to be desired, it will be safe to take advantage of the loan with a guarantor. This is because in the event of a problem, the person certifying our repayment capacity undertakes to take over the debt.
How do I find loans from private individuals?
As it has already been mentioned, a loan can be granted not only by a company but also by a person without a physical one. However, usually entrepreneurs make the most attractive offers available. Thanks to their diversity, we get the opportunity to find an offer on conditions corresponding to our requirements. Where can I find private loan announcements? They can be found on many thematic forums or created for these platforms. Very often all you need to do is enter the appropriate phrase in the search engine. When we find an offer that interests you, remember about your duties to the Tax Office. Few of us realize that private-currency loans have been covered by the PCC tax obligation. It is normally 2% of the amount borrowed. All formalities are on the side of the borrower.
What is the situation in the case of non-bank loans? First of all, we will not be required to settle any formalities regarding the PCC tax. All documents that are obligatory for borrowers are an online application and signing a contract. Secondly, thanks to the register of loan institutions created by the Polish Financial Supervision Authority, we can be sure that the lender is reliable and trustworthy. We also have the opinions of experts and people who previously used the offer. In addition, as already mentioned, the loan period and the amount of the liability will not be imposed on us. Each borrower can adjust them to his current financial situation.
Stock exchange of private loans
The private loans market is a place where both borrowers and investors can publish funding announcements. The only limitations on these pages are those that the administrator will enter. Currently, the regulations contain three basic prohibitions. It is forbidden to make announcements taking into account any initial payment and paid hotlines or text messages. As you can see, the offer can be published by anyone. Their content leaves much to be desired and we will receive detailed information only after contacting the creditor. In addition, no one can guarantee that in a short time we will find the right loan. It often turns out that the requirements of private lenders are the same or more stringent than those in non-bank companies. If we want to find an attractive product as quickly as possible, it is worth to go to non-bank institutions and use the comparison engines.
Are private non-bank loans guaranteed?
Each loan involves a lot of responsibility for both borrowers and lenders. Nobody will give us financial support without proper security. In the case of private liabilities, it is common practice to oblige the debtor to sign a bill of exchange. By signing it, we confirm our ability to repay the debt. This document is proof that each party agrees to the terms of the loan and assumes the responsibility associated with it. In the case of borrowers, this is, of course, a timely repayment. However, it is necessary to take care of the proper editing of the document and to analyze whether there are any hides in the records that allow the creditor to take over our property.
It might seem that a private loan is an ideal solution for indebted people. However, as you know, each medal has two sides. In this case, these are not only additional formalities, but also no restrictions on costs or the consequences of late repayment. In the case of non-bank loans, everything is subject to the regulations contained in the anti-usury law. The maximum interest rate can not exceed twice the statutory interest, and the remaining costs amount to at most 25% of the total loan amount and 30% of this sum on an annual basis. In the case of private loans, the lender has full freedom, which from the perspective of the borrower is not necessarily an advantage.
Private cash loans – formalities
What should a loan agreement contain? The basic information that should of course include personal data of the lender and the borrower. In addition, you can not forget about the amount of the obligation, the repayment date and the form of refund, ie the number and amount of installments. The interest rate is clearly important as it is one of the parameters affecting the final costs of the commitment. We should also remember that the contract should contain information about the consequences of non-payment. As it was mentioned, a private loan is governed by its own laws. Therefore, it is worth taking the time to analyze the document to avoid additional problems.
A loan from a private person means not only many advantages, but also disadvantages and dangers. High availability may tempt potential borrowers who do not necessarily think about the other terms of using this method of financing. If we decide on a private loan, we recommend that you read our article “CHECK WHAT YOU SHOULD CONTAIN A LOAN AGREEMENT” . Do you have doubts? Familiarize yourself with our offer of non-bank loans.
Non-bank loan online
Non-bank loans guarantee us clearly defined. In the case of decisions regarding our finances, this is undoubtedly a big advantage. In addition, we have the ability to adjust both the amount of the obligation and the loan period to your own needs and minimum formalities guarantee us to receive the missing money at an express pace. It is also worth mentioning that with the development of this financial sector, there have been various variants of financial support, such as payday loans without loan bases, without transferring a penny or a payday as proof. We encourage you to read the offers!