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Social loans – light and dark sides of private borrowing

Until recently, social loans developed mainly on foreign markets, where even today they are triumphing. In Poland, they were not so popular at first, especially when compared with payday loans offered by loan companies. However, this has changed and today we can take advantage of attractive loans granted by private individuals through special internet portals.

 

What are social loans?

social loans

Social loans, also known as “social lending” in English, are loans granted to private individuals by other private persons, called investors. These types of loans are made through an intermediary who provides the appropriate environment, i.e. an online platform on which it will be possible to take and grant financing, including setting up a customer account, completing a loan application, verifying identity and signing a loan agreement. The administering company also analyzes the creditworthiness of applicants and verifies their credibility in the BIK register and debtors’ databases.

By submitting the application, it will be placed on a list that can be viewed by private investors. They can see all the details of the loan – its amount, preferred repayment period, applicant’s creditworthiness and credit history, as well as submit an offer specifying the conditions for granting. Of course, it may happen that many offers are submitted to one application and it depends on the borrower which one they choose.

 

Where can we find a social loan?

Where can we find a social loan?

Currently, we can find several trusted companies that run online intermediaries to grant loans. The good news is that the offer in each of them is very diverse, both in terms of available loan amounts, repayment periods and their types: payday loans or installment loans. All parameters can be set the same as for any other online loan – on convenient sliders. We can apply for a social loan in the following companies:

  • Willow Finance. In this case, we can count on an installment loan of $ 12,000 to be repaid in up to 24 monthly installments. What’s more, during the loan period you can extend the repayment period or postpone the repayment of one installment.
  • MoneMood. Here we meet with payday loans of up to $ 4,000 and a repayment deadline of no more than 30 days. If we decide to borrow no more than $ 1,600, we will pay only the principal interest due to the investor.
  • Pillow Financing On this portal, we borrow from 50 to 30,000 dollars, both in payday loan and installment loan. The repayment period is determined individually each time and the borrower indicates the desired parameters in his application.

 

Why use social loans?

social loans

Social loans perfectly fill the empty space left by banks and loan companies, so you can count on finding a loan that will not be given by two previous institutions. Let’s take a closer look at other advantages:

  • A wide range of. Convenient loans will find here those who count on extremely preferential conditions, but also those who do not have adequate creditworthiness or are listed in the database of debtors.
  • Flexibility. The repayment terms and the cost of the loan are determined by borrowers and investors, not imposed from above. The borrower can choose the best offer for him, but also negotiate the terms.
  • Low loan costs. An applicant with high creditworthiness can count on the fact that a lot of offers will appear with his application and therefore they will be competitive.
  • Convenience. Social loans do not deprive borrowers of the convenience of online loans – they are easy, easy to pick up and you can get a loan online.
  • Earning opportunities. These types of loans not only save cash in a difficult financial situation, but also allow private individuals to earn. According to calculations, it can even be 10-13% per annum.

 

Loans without defects?

Loans without defects?

As you can see, social loans are really good, even when compared to other, more popular offers. Of course, they also did not avoid defects. However, these are not deterrents and will not disturb some borrowers

The most common problem that borrowers in need of really fast financing may face is that sometimes you can wait up to several days to receive money. It depends primarily on the applicant’s financial situation. The better it is, the sooner the offers will appear – it can be a few minutes or even a few days before any investor applies. It should also be borne in mind that the application will not always receive any answer – the auction may end without a solution.

Some platforms maintain internal rankings of borrowers who are awarded points for reliability, the number of loans taken and their timely repayment. It may happen that a new customer, even if he has adequate income and a positive credit history, will have problems obtaining an offer from investors who will choose proven borrowers.

 

Security above all

Security above all

Companies that supervise the provision of social loans ensure that everything is done safely, both for borrowers and investors. Each borrower must undergo an identity verification and also sign a loan contract legally constructed and securing the interests of both parties. So there is no fear that one or the other will fall victim to fraud.

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