Are private loans safe?
Although banks and non-bank companies are considered two, the only possibilities in terms of the need to borrow more money, they are not monopolists on this issue. In addition to loans, loans and payday loans, there is also the possibility of a private loan. What is a private loan, what to watch out for and whether it is safe?
Although the popularity of banks and loan companies is growing at an avalanche pace, and the number of non-banking customers is multiplied every year, there is still a large group of people who for various reasons do not want to use these services.
Either they do not trust loan companies, or they do not have time to go to the branches located in a given place, they do not find themselves in online debits or they simply can not – bad financial history or poor creditworthiness do not allow them.
If you can not borrow at an institutionalized loan company, there is another path – private loans. It is a niche, but regulated by law and still popular method of borrowing money by private individuals. And despite the fact that around this method of borrowing money – rightly or wrongly – raised a lot of fears.
Private loans – what is this concept?
Private loans are a type of liability that are incurred by persons without a registered activity in the form of a loan company by the Polish Financial Supervision Authority (KNF). In this way, a private loan can really be given by any person.
- Family member.
- Partner / partner, husband / wife.
- A stranger.
- A person who moves in a completely different industry every day.
A private loan can take the form of an object as well as cash, and the rules of its operation are regulated by the Civil Code – just like the loan sector once. The loan value can be any. From a few, a dozen or so, up to several dozen and several hundred thousand. Up to PLN 500, the loan does not have to be written in writing, above this value – it is recommended that the relevant document be prepared. Otherwise, the transaction can theoretically be undermined by anyone.
How to search for a private loan?
Although a private loan is in itself a liability functioning between people who know each other well or with a close command, this sector offers its services, for example on the internet or in the form of announcements on boards and poles.
It is worth looking for people offering a private loan from certain websites and from people who provide as much as possible verified information about themselves. Unfortunately, the potential risk of meeting a cheater is considerable. For this reason, it is best to look for a private loan in the company of an experienced person or a financial advisor.
Why is it worth to take out a private loan?
There are many arguments for the popularity of private loans and the sense of looking at this type of commitment.
- They are simple and quick to get.
- They often have loose conditions, determined on the basis of negotiations between the parties. They do not result from the provisions of law.
- They do not require too many formalities, most often only a contract and an ID card are needed.
- It is rarely required to verify in the databases of debtors and financial registers – as a result, a person taking out a private loan may not have the best financial history and negative creditworthiness.
- You do not need to verify the data, it is assumed under a gentlemen agreement that both parties are fair and give true information.
Private loans and security
Going back to the security issue, it is worth discussing whether the private loan is safe at all. And it is entirely dependent on the type of person in whom a private loan is made. Naturally, it is the least risky to borrow money from relatives and people we know well.
In the case of an unknown person, in addition to the identity verification mentioned above, any person who is reluctant to disclose his / her details should be avoided.
- I do not want to provide full personal information.
- He does not want to give information about what he does.
- He uses unnatural haste in signing a contract or does not want to sign it at all.
- In an exaggerated and exaggerated way he extols the offer of his loan.
What elements of the offer should you pay attention to?
In the case of private loans, it is worth remembering what is most important when reading the loan offer. A private individual, if he specializes in such obligations, in a similar way to the loan company will try to give the advantages of his offer. It is worth approaching it critically and prepare yourself for verification of key elements.
- The loan amount and the repayment date (whether it will settle the obligation).
- Additional loan costs (what percentage of the liability is, for example, commission or interest).
- Interest rate.
- The clause of consequences of untimely repayment (after which time, for example, penalty interest is charged or the case is referred to the court).
- Securing the contract – beware of private loans from unknown people who want to, for example, pledge a house, a car, a plot and any property.