The term credit refers to a way of borrowing a certain amount of money from a bank, which you then have to pay back with interest. Since not every bank is ready to guarantee everyone a loan, there is a variant of the loan from private individuals.
The money is not handed over to you by the bank, but by a natural person.
These individuals can be friends, relatives, or strangers who offer a loan at a reasonable interest rate. In order to draw on the loan, a contract is concluded between the two parties that includes all payments and interest as well as possible special provisions that must be met.
Depending on how you have agreed, the contract runs for a certain period in which the borrowed money plus the required interest must be repaid. In Austria, private loans have existed since the 1950s, and since then they have spread and improved.
What are the advantages of a personal loan?
Such a loan is usually easier to obtain because private individuals are not as demanding (as banks are). Furthermore, the contract is usually drawn up quickly and the payment can be made within a relatively short period of time, which enables the borrower to receive the required money directly.
In addition, a negative entry in the credit protection association does not become an insurmountable hurdle that prevents you from getting a loan in a bank. The last big advantage with personal loan is flexibility. If the lender is a friend or relative, payments can be postponed or changed (if necessary) if the financial situation changes. This is difficult or impossible at a bank.
How can you easily and quickly find a private individual who grants you a loan?
If you don’t have any acquaintances, friends or relatives who can give you a loan, you can contact a credit portal. In this portal, various loans from private individuals for private individuals are offered on fair terms. In order to ensure seriousness and security here, an exact identity check is carried out for each new member, which ensures transparency within the portal. Another safeguard for lenders is a deposit guarantee, such as is available in banks.
To secure this, each borrower must deposit an amount into a fund that is used to pay out to lenders who receive no money back from their borrower. As a borrower, you have to introduce yourself in the portal and specify what you need the money for, what interest rate you are willing to pay and in what period you can repay the money. With this information, the potential private lenders can decide whether and how much money they want to lend to the borrower.
This variant of the loan brings advantages for both sides, so the borrower finally gets his money for his project and the lender makes a financial profit from the interest.