A P2P loan helps to create quick and efficient liquidity. The application for a P2P loan is usually free of charge and without obligation.
In order to be able to provide you with the best possible information on this topic, we have drawn up a P2P credit comparison with our finance team and experienced experts and presented it clearly.
If you are also interested in further information, we recommend our detailed guide, which you can find under the comparison.
What is a P2P loan?
Up until a few years ago, it was hard to imagine taking out a loan outside of the traditional banking world. As a rule, consumers went to their house bank and asked for financial support in the form of a loan. The very brave may have also called on the competition to restore proper liquidity. Until then, however, there were no extensive loan comparisons and offers that also work outside of traditional banking houses.
Nowadays, everything looks a little different. Not only that loans are offered on every corner. They also no longer come from traditional providers. Rather, it has become a trend to take out personal loans. In other words, loans in which the money is made available by private investors for private individuals or even the self-employed and freelancers as well as pensioners. Such loans are called P2P loans and are brokered on corresponding platforms on the Internet.
The benefits of a P2P loan for the borrower
P2P loans offer various advantages that borrowers and lenders can benefit from. Borrowers have the following advantages:
- Credit even with an unfavorable credit rating
- lower interest costs
- transparent procedures
- quick provision of money
- uncomplicated borrowing via appropriate platforms
- Credit request free of charge
- no hidden costs
The benefits of a P2P loan for the lender
The lenders who come from the private sector also have various advantages when they invest their money in P2P loans. These would include:
- high returns
- comprehensive support and advice
- the money works and is not just lying around in the account
- high transparency within the investment
Is there a free P2P loan?
You can always apply for a P2P loan free of charge. Costs only arise when the loan agreement has been signed and the money is paid out. Then, as with any other loan, you also have to expect interest and fees. You can see in advance how high these are from our comparison, which we would like to recommend for the selection of the suitable loan offer.
Possible uses for a P2P loan
A P2P loan is usually taken up quite quickly. Therefore, there is a legitimate question of what the money from the loan can be used for. The fact is that not all loan projects are funded. Because even with P2P loans, certain guarantees must be met, the borrower must be able to repay the loan in full and the money from the loan must flow into meaningful projects. A moderate credit rating should therefore be given.
Generally, projects are supported in which investments are made in the future. For example moving house, buying a car, rescheduling debt and many other everyday activities. On the other hand, all projects are rejected that have no basis, the reason for which is not clear, and which should also be implemented with a poor credit rating.
The 3 most important criteria for the best P2P loan
Finding the right credit marketplace and thus P2P credit in the test may not be easy. We have therefore put together the 5 most important criteria for the selection.
1. Type of loans
Always take a look around in a credit marketplace to see what types of credit are offered there. For example, some providers specialize in personal loans, while others also offer corporate loans. Take a close look and check whether you can also find the loan you need on the selected platform.
Another important criterion is the protection of the loans. Secured and unsecured loans are offered. It is secured when the brokered loan is secured with a real asset – ie a pledge. He is unsecured if this does not apply. We recommend that you use secured loans in your own interest. This lowers the effective interest rate because the lenders can rule out an increased risk of default.
3. Financing platform or intermediary?
There are two different marketplaces that are suitable for applying for a P2P loan. On the one hand there are the marketplaces where loan projects are put online and the investors are financed directly. However, there are also marketplaces operated by an intermediary who acts as a middleman and brings borrowers and lenders together.
If a marketplace is used that belongs to an intermediary, the intermediary receives a commission from the borrower after the loan agreement has been concluded. This is already included in the loan agreement. Although this means a higher financial outlay, it also has the advantage that the entire loan project is secured. The lender cannot simply withdraw from the contract and must also provide the amount of money that he has promised.
This is how taking out a P2P loan works
In order to take out a P2P loan, you need to register with a provider or platform. You must therefore have an internet-enabled computer to apply for the loan. Registration with one of the providers is free and non-binding. The same applies to the preparation of the loan offer, the determination of the creditworthiness and the sending of all documents.
First, you should start a comparison to analyze different loan offers. We recommend our comparison, which has already been created, or the comparison calculator, which you can use as you wish.
If you have found a suitable provider in the test, then you should register with it and fill out the credit form. It is important to provide very precise information in order to keep the chance of a loan as high as possible. Add all the necessary documents and then wait for the agent to contact you.
He will then submit a loan proposal to you, which you can accept or reject. Take a close look at the offer and do not only pay attention to the effective interest rate. All conditions count in order to receive an objective opinion about an offer. Therefore, pay attention to flexible repayment options and special conditions that the lender may attach to the lending.
If you can make friends with the offer found, then take it. Sign the loan agreement and wait for the money to be paid out. Use it wisely and remember to pay your installments on time every month to avoid trouble.
Our conclusion on applying for the best P2P loan
A P2P loan is a good alternative to conventional loan offers. Among other things, it can be worth considering if an unfavorable credit rating makes it difficult to borrow in the traditional way.
The special thing about a P2P loan is the fact that borrowers and lenders benefit from the loan and thus create a win-win situation that is commendable.