You need money, but you can not count on a loan You may be considering taking a private loan, but is it a safe form of borrowing? Most people who have had contact with borrowing or are interested in this topic are well aware of the difference between a bank loan and a non-bank loan. However, few people know what private loans are. In comparison with loans from non-bank companies, they do not enjoy much, because they bring with them more threats.
What is social lending?
Social loans appeared on the Polish financial market in 2008. This was the result of the demand for this type of services, because the banks set the bar high for their clients and hardly anyone was able to meet the conditions necessary to obtain a loan. Social lending consists in concluding transactions between two natural persons – one of them is an investor and grants a loan to another person who needs financial support. For this purpose, special websites are created – this is where the parties interested in the transaction meet.
Doubtful security of social loans
The advantages of social loans are distinguished by:
- Formalities limited to a minimum
- Offers available on the internet
- Flexible contract terms
- Terms of loan agreed between the parties
When we need financial support, these types of offers may seem attractive to us, but often our problems can be solved by non-bank installment loans. There are several differences between these services. In the case of social loans, despite signing the contract, we are not sure from whom we borrow and how this person will cooperate with us. Unfortunately, Polish law still has many gaps that use financial frauds, driving the other side into trouble, which can even lead to a spiral of debt. The situation is different with loan companies. Of course, dishonest players also get here, but at least we have the opportunity to verify lenders before signing the contract.
Non-bank loan better than private one?
As we wrote above, both non-bank and private loans are very similar in many respects. However, the most important criterion we are guided by when choosing a commitment should be our security. Private loans are like a lottery – maybe we will get a fair lender, but nobody can promise us that. There is also the other side of the coin – investors also have no guarantee that their client is honest. In the case of non-bank loans, we can feel safe. And even if we have doubts, we can quickly verify the credibility of the lender. How to check the integrity of a loan company? The databases, serves all of these services – all of them provide a reliable list of companies we can trust. After such verification, we will certainly avoid the risk by taking a loan in installments.