Gone are the days when the market for financial products for loans was limited to the banking offer. Currently, the non-banking sector is developing very dynamically. On the one hand, we have the option of using loans proposed by loan companies. At the same time, a gradually growing group of borrowers is noticing the benefits of a social loan product. Then let’s look at both solutions.
Traditional non-bank loan
Payday loans or long-term loans are readily chosen due to the speed of verification of the submitted application and extremely simplified awarding procedures. Potential borrowers are also attracted by the way they are settled, ie in a very convenient form online. In fact, within a few minutes all formalities are completed. What’s more, completing the verification form is so uncomplicated that even older people, who do not have such freedom in using a laptop or smartphone, are perfectly suited to this task.
People of all ages apply for a non-bank loan, if of course they are of legal age. Business loans are also available. A huge plus of this solution is, above all, wide availability, even for those who have faced the refusal to grant a bank loan due to low scoring at BIK. It is worth noting that some loan companies also check this base or the base of debtors. However, unlike a bank, any negative entries do not have to mean a refusal to grant a loan, because the provisions of the banking law do not apply in this case. Recently, new customers of some loan companies can take advantage of the unique offer, which is the first free loan. The amount of such a loan is usually several hundred dollars, it is unlikely to get a higher than $ 2,000.However, the lack of commissions, interest or any additional fees certainly tempts potential borrowers.
Social or private loan
It is basically a kind of non-bank loan, but in this case we are not dealing with loan companies. The lender is a natural person. The essence of the concept of social lending loans is to create a website that makes its space available to private individuals – it is a place where lenders meet with borrowers. The first platform of this type began to operate in Great Britain, and it was in 2005. It is the Anglo-Saxon market, but also the Chinese one, that turns out to be the most developed in terms of social loans.
In our country, compared to the short-term and long-term loans sector offered by loan companies, it is still a niche. However, there is a noticeable development of this form of borrowing. Social platforms have been created and their share in the loan market is steadily growing. This is definitely an option worth considering, because it allows direct negotiations and thus gives the opportunity to obtain really favorable conditions for repayment. There are currently several platforms offering social loans. Importantly, they are intended for individuals and entrepreneurs.
There are also platforms that only associate investors, but you cannot apply for a loan on these. The process of obtaining a loan is not complicated. First of all, you need to register or submit an application on the chosen platform, but it is a matter of a few minutes. Usually you only need an ID card, bank account, active email and mobile number. It is worth paying attention to the fact of two stages of verification, the first of which is necessary and includes checking the data provided during account registration. The second is already voluntary, but this way you can significantly increase your rating and thus increase your chances of getting a loan quickly and its better terms.
Platforms offering p2p loans often use special applications for quick verification, which speeds up its process. Voluntary verification usually means presenting proof of income, signing a declaration on the absence of any obligations arising from activities, eg bailiffs, but also presenting a BIK report. Then you only need to submit a loan application and wait for the investors ‘or lenders’ suggestions.
Non-bank loan vs social loan
Both forms have their advantages. Certainly, the great advantage of these solutions is the ability to settle all formalities in a convenient form – online and without leaving home. In addition, you do not have to declare what the money will be used for. Compared to bank loans, the list of formalities is minimal. It is also a safe way to get a favorable loan. In many cases, having a low rating in the BIK database or negative entries in business databases does not exclude the possibility of obtaining a loan – the way out of this situation is an additional security for the lender in the form of a promissory note or pledge (this is particularly popular with social loans).
Virtually every adult, as well as companies, can apply for a loan. Non-bank loans are also an option for the first free loan. On the other hand, social loans are another advantage – they allow negotiations that are aimed at optimally adjusting the amount of installments repaid to the individual capabilities of the borrower. You can often borrow money slightly cheaper than in a non-bank company. However, the waiting time may be a little longer. That is why everyone should decide for themselves whether they want to pay more and have the money on their account almost immediately or prefer to wait a few days to borrow on better terms.