Currently, banks are introducing more and more restrictive rules for granting loans: they thoroughly verify the creditworthiness of their clients and the history of their debt in BIK or KRD. In this situation, many people lose the option of borrowing money due to lack of employment under a contract of employment or slight delays in repayment of installments in the past. For this reason, private loans are becoming more and more popular.
Private loans – chance or risk?
A private loan is often treated as the last resort by people who cannot get a loan from a bank. We can come across loans offered under a promissory note or loans secured by a mortgage. Lenders (investors) often emphasize that the advantage of their offer is great flexibility and the opportunity to negotiate terms individually. This means that sometimes we can find a quite favorable offer. Unfortunately, we must be extremely careful. In many cases, fraudsters prey on people in financial difficulties and impose huge interest (although their upper limit is regulated by law, the client may not be aware of this). Sometimes the loan is also used to try to take over the debtor’s assets.
What to watch out for when choosing a private loan?
Of course, in some cases a private loan can pay off. Before we decide to contract it, however, we should carefully examine the contract and make sure that we know all the costs associated with entering into a commitment. Let’s pay attention not only to interest, but also information about other possible fees. Let’s always pay attention to the type of collateral – loans are granted under a promissory note or loans with collateral in the form of a mortgage. In the case of such loans, he must always be very careful – if we are late with repayment, we can lose much more worth the flat. The lender should never demand any fees from us before we receive the money – when this is most likely you are dealing with a fraudster.
Private loan – alternatives
A private loan should always be the last resort. Before, it’s worth looking for alternative solutions. It is worth paying attention to the payday loans offer, for example – quick loans that can be repaid in installments. In this case, the company checks whether we have stable sources of income and what our debt history looks like – however, banks do not do it so rigorously. If you already have a small debt, this will not cancel your chances of getting payday pay.