Surely you’ve ever heard of P2P loans or peer to peer on the market. Basically these are loans between people where the person who lends the money is another individual.
It can really be a private individual or company, what is certain is that it is not a financial company, as if it were the banks. Unlike years ago, more and more people know the uses of this financing.
This is most likely considering the growth that private loans are having in the financial sector. It is this type of loan signed by investors and other private lenders that increasingly represents a higher percentage of financing.
Unlike banks, p2p loans continue to offer new financial alternatives as the years go by. Not only that, through this financing applicants can get money in impossible situations by bank. Which is certainly one of the reasons why people request this financing. It is not the only thing that is all said, in fact this type of credit has one of the best business loans seen in the market.
What are P2P loans?
They are credits between individuals where both creditor and debtor are people. Instead of being the creditor a financial entity (bank, financial establishment) they are private individuals. For this reason, they are called this way.
Not only this way, if we talk about private, private or private equity loans, we are talking about the same type of financing. The difference perhaps is that people associate p2p loans with other types of credits. Many times this financing is actually associated with crowdlending or crowdfunding.
That is, a type of credit for entrepreneurs where the person who asks for the money is a company / entrepreneur. They are also lenders who lend the only thing is that they do it not so much on the basis of guarantees but on the basis of the business project.
Characteristics of p2p credits signed by people
When talking about these credits, the first thing people want to know is their characteristics. They want to know to decide whether or not they might be interested in carrying out the procedure.
From Spin Lender what we can say is that everything depends on the processed product. In the same way that there are private loans without collateral, there are also those that will require guarantees.
Now there are a series of characteristics that if we see how they are repeated in all p2p loans
- They are always faster than those signed by traditional financiers. In this way they can be seen as fast loans .
- The processing of the same will always be carried out on the internet.At least what is the processing of the credit because the signature if it is in person many times.
- The APR of these loans between people is usually higher than that seen in banks. However, this cost difference has been decreasing in recent years and is currently small.
- These loans are offered by private financiers and financial platforms.
- There are business loans and loans for individuals.
- They can be processed in situations of all kinds, not having as many problems as instead if we see in a bank. It is possible to obtain financing being in Financial Credit Institution, without demonstrable income or not having financial stability. Even so, from Spin Lender we recommend that clients consult in advance as each loan is different. That there are loans with Financial Credit Institution within the p2p credits does not mean that all of them can be processed in this situation.
- They can be considered as loans without paperwork because compared to other financial companies, little is requested.
Requirements to obtain financing between individuals
Despite being an increasingly recommended type of loan, not everyone will be able to apply for this financing. Whether you are a company or an individual, you are interested in reading this section if you have in mind to request one of these particular loans.The requirements of this financing may not be as high as that of the banks, but they also apply.
Among some of the main ones we can point out:
- In case of being a company you have to go to a Crowdlending financial platform also having to have a business project . If you do not have any project do not go to any of these platforms because it will be a waste of time. Having a business plan, feasibility study is mandatory for all companies and entrepreneurs who want to obtain loans without collateral. If you do not want to provide such documentation, what you will have to do is process with a guarantee where it will not be necessary.
- For medium or high amounts it will always be necessary to provide guarantees. P2p loans being private lenders who lend is something that they will demand from a certain amount. In amounts less than 6000 USD if it is relatively easy to get without a guarantee. When the amount is higher the situation will be different.
- If you want to obtain financing without a guarantee, it is necessary to have demonstrable income of some kind. It does not matter if they are low income, if you can justify something welcome it is. The most complicated thing is to get loans if you do not have any kind of proof of income. Before if it was possible, nowadays after the changes in the financial sector it has become more complicated.
- Financial Credit Institution may or may not be a problem depending on the credit processed. If you provide guarantees it is indifferent, it depends on personal loans. There are some that can be signed while in a register.
Who goes to peer-to-peer loans?
All kinds of people do it, also those who by bank could obtain financing. There are also people who turn to this financial alternative because they think that by bank it will not be approved but they are the least.
A significant percentage of those who resort to this financing do so for other reasons. Speed is, in our opinion, the main one of all of them because the difference in terms between financials between people and banks is abysmal.
Just as a private equity mortgage can be signed in 7 days a bank mortgage we speak of months. This difference at the end is noticeable and marks one before and after in the financial sector.
Advantages of private loans
We can talk about the possibility of signing complicated loans as the option of obtaining financing for companies . As for the processing requirements, they are also small, thus being fast loans without paperwork.
And what are most people looking for today when they are looking for a loan? So we have been able to check speed, ease and little paperwork.