Personal Loans

Personal loan a loan granted by a bank to a private individual.

A personal loan is a loan that is given from one bank to one person. This is usually a purpose-based loan. This means that the funds can be used for a variety of purposes, such as a dream trip or a renovation . When awarding such a loan, the bank checks the creditworthiness of each client. This means that not only a query is obtained, but for example, also a safe, regular income must be present.

Likewise, the bank usually inquires about collateral , such as Bauspar , life insurance and real estate. Furthermore, it is usually important that the age of majority has been reached and that the place of residence is within Germany. Private loans are offered in different amounts and terms .

The funds are paid in monthly installments, often with the possibility of special repayments.

The loan from private

In this variant, lenders and borrowers are two already known persons.

A private loan is made between two private individuals. Thus, no bank is involved here. There are, however, two different variants. For example, it is possible to borrow money from a family member, friend, work colleague, or other acquaintance. Here the respective conditions can be freely negotiated with each other. However, it is advisable to record the agreements in writing so that no disputes may arise at a later date. Another variant is the so-called P2P method.

P2P: peer-to-peer

The privately loan is granted through a corresponding platform.

Another form of private loan between two people is the P2P model. P2P stands for the English “peer-to-peer” and means something like “human-to-human”. However, the term itself can be used not only specifically in the banking industry, but in all transactions that take place between two private individuals. For example, it can be about services.

As an alternative to a private loan from a bank, borrowers and lenders meet on corresponding platforms on the Internet. The platforms themselves do not lend and finance themselves through the fees, which are usually only a small percentage of the loan amount. Due to the lack of participation by a bank, borrowers usually benefit from a rather low annual interest rate.

Prerequisite for a P2P loan

Among the basic requirements is the age of majority, a German residence and a German bank account, a secure, regular income and a good credit rating.

Even if no bank is involved, there are several basic requirements for a P2P loan. So it is indispensable that the budding borrower has reached the age of majority and is fully capable of acting. Furthermore, his domicile must be located within Germany. But also a good credit rating and a German bank account are necessary. In addition, a permanent employment relationship and a corresponding, secure, regular income are often required.

advantages

Free registration, simple and uncomplicated process.

A P2P loan offers many advantages. For example, signing up for most of the corresponding platforms is free. As a rule, a fee is only payable for a successful mediation. But also the further procedure is simple as well as uncomplicated. For example, as a potential borrower, you simply specify the desired purpose and the sum. Interested investors are then able to view the various publicly held loan applications, to review them and then to vote for or against the awarding of a loan. Once the loan amount has been transferred to the borrower, the repayment is made in monthly installments.

Although a credit check is also made on a P2P loan, it is fully automatic.

Since such a credit request indicates the desired purpose, it may well be possible to obtain credit even in the case of a negative credit check. In addition, the decision on a loan is usually much faster than a bank is the case. The respective amount is usually credited within a few days on your own account.

Good to know: With a P2P loan, it is possible for the two contracting parties to freely negotiate the conditions. In this way, suitable conditions are possible for both persons.

Compare and save

On corresponding platforms, there are different offers, so that under certain circumstances can be saved significantly.

In the meantime, a large number of private-equity lending platforms exist. Because of this, you should not miss the opportunity to compare the various offers well with each other, as these differ significantly, for example, in terms of terms and conditions.

So it is quite possible to save a lot here.

Collateral and special repayments

With a smaller loan usually no collateral is necessary. Special repayments are usually readily possible with a P2P loan.

If the private loan moves on a smaller scale, collateral is usually not required. However, it may be advantageous, especially if the credit rating is not so good, if a second borrower is mentioned. This increases the chance of getting a loan.

In contrast to most banks , private loans are usually welcome payments and repayment before the actual due date . A prepayment penalty is not common.

Attention: Within Germany §32 of the Banking Act applies.

This means that anyone who offers their money for lending on a commercial level needs a permit issued by the Federal Financial Service. As a result, many German intermediaries have begun to change their business model to include a bank in between during the lending process. In this way, the necessary full banking licenses are available.

How to get a personal loan?

Many people are looking for a solution to borrow despite the fact that they have made a loan once and the banks know it. In our article, we will examine what can be done in this case.

The Central Credit Information Database has the data of everyone who has ever taken a loan. It is stated that the person has failed, or has committed an abuse, but also if he or she has paid properly. So, unlike the previous list, there are not only those who once stumbled, and for some reason did not pay the loan installments, but the good debtors, the former are negative, the latter are positive.

Credit institutions, when assessing loan applications, check all credit applicants for the debtor and obtain the data stored, as appropriate. They have a vital interest in getting to know them so they can be sure that their money will be seen in the loan.

This check is part of the credit assessment process at every bank and is beneficial to everyone. Well-paid debtors can get better deals, and borrowers who fail to repay the loan do not borrow money to prevent insolvent or over-indebted customers from taking on additional financial burdens on their neck, and of course, the bank also avoids the risk of losing out on their money.

The point is that anyone who has never properly paid for his credit – exactly the overdue and unpaid debts are higher than the minimum wage at that time, and lasts for more than 90 days – its data are classified as negative and the banks do not give him credit. However, in some cases, there is a chance.

If someone does not settle his debt, he will store his data for ten years, and no one will lend to him during that time. On the other hand, if you repay the outstanding loan amount, you will first be in a passive negative status, and after one year you will be automatically and permanently deleted. Then, with a conscientious conscience and a greater chance, you can apply for a new loan. Of course, only if you have carefully considered whether you really need it and whether you will be able to pay.

If you do not repay, but you can close the loan transaction with a solution, even with the loss of the bank, your data will be kept for five more years, so you will not get any credit.

Whether it’s on the list, everyone can query for free at any home financial institution. They are obliged to inform their clients about the classification and the data contained.

There are some credit institutions that are rumored to be given credit even in the case of a negative rating, but the reality is that every financial institution checks the status of their borrowers, and who has an active negative rating cannot get credit. Of course, this can be avoided by borrowing for the name of your spouse, other close relative or friend, but financial experts warn you of such a deal.

If someone has already made a loan before a new one jumps in, you have to think about how it will be repaid. Nor is it recommended that somebody settles for a bad loan with another loan. Although there are loan redemption schemes, these can mostly be used to replace loans with higher interest rates earlier, due to the current lower interest rate environment, to slightly more favorable interest rates and repayment loans.

According to the recommendations, who slipped with his credit, he should concentrate primarily on settling it somehow. This can usually be negotiated with the bank, but even with the bailiff, and there is also a private bankruptcy facility, where it is possible to mix up with the debt trap with austerity and state support.

Loan Separator – Helping You Find Your Way in the Mystery of Loans

On loan separation website, you can quickly get acquainted with the most important definitions, abbreviations, and the most common forms of administration with the help of a personal loan . These are very practical, because the average person does not have a financial qualification, but you may need the services of the banks just like anyone else, so you can definitely get some extra information.

For example, you can use personal loan calculator on website to find out how much money can be spent, how long it takes, and how fast the administration is done. In addition, you can also read what happens in the Credit Separator if for some reason you are unable to pay additional installments.

Depending on the amount, a credit administration may be a shorter and more lengthy process , so it is important that you understand the common problems that occur before taking out a loan. That’s why, with the help of a lot of useful information on Credit Separation Website, you will know a lot about the world of loans , so that you can make a more responsible decision, which will not be crippled by the family coffers, but the quality of life for the whole family will change positively.

We place great emphasis on providing useful information on Credit Separation page, so we strongly recommend that you spend some time reading articles and glossary to get more information about the credit with more information.