A brand new and most borrowed type of loan is P2P loans. The term P2P comes from English and is an abbreviation of peer to peer or person to person. These are online loans provided by people with each other through the Internet, without the participation of a bank or non-bank company. This type of loan has been operating in the world for a long time, and has only recently started to assert itself.
How Do P2P Loans Work?
The principle of P2P loans is that the loan applicant registers on the relevant website, which covers these loans and completes the application, stating personal data and other important information about his person. If approved, the user can then place the application on a website to show potential investors who can invest their money into it and lend it to the applicant. The trade is thus advantageous for both sides – the loan applicant gets better interest, the investor will better appreciate his money. In our country, it is one of the largest providers of such loans, such as Bankerat, Benefi or Zonky.
How can you apply for this type of loan?
While you can always ask for a bank loan in person at a bank branch and there are a number of non-bank loans, there is a possibility of personal contact; These loans are always executed completely via the Internet interface and there is no personal contact. A person who wants to borrow money does not have to go anywhere and can handle everything from home via his computer.
How are P2P loans beneficial for loan applicants?
For those who want to borrow money, P2P loans are particularly beneficial in that they offer much lower interest rates than banks. The specific interest rate depends both on the company that operates the P2P loan portal and on specific requests – the more risky the credit, the higher the interest rate. In principle, however, average interest rates for P2P loans are significantly lower than those for bank loans. Another advantage of P2P credits is the overall fair and transparent conditions, with no hidden fees or charges in advance. Although no one can get a P2P loan (the applicant’s creditworthiness and ability to repay it is reviewed by the portal operator), those whose application is approved will definitely pay less than if they took the same loan from any bank.
How are P2P loans beneficial to investors?
On the other hand, P2P loans are also beneficial for investors, respectively. people who want to make good use of their money. By investing in these loans you can get much more interesting interest than if you left them in the bank and the risk is minimal due to the set conditions. Thus, P2P loans have become a new and very attractive option for all who have enough savings and would like to invest advantageously. In addition, some companies can invest in several hundred crowns in P2P loans, so this opportunity is open to virtually everyone.
How to orient yourself when choosing a P2P loan?
The offer of companies that run P2P loans is not so big yet, but for some people, the bull doesn’t have to choose the best one. If you are unsure about which of the operators is best for you, you can look at the clear and independent comparison we offer on this page. We have prepared for you independent reviews of Czech P2P loan portals and you can easily find out the differences between them. You can also browse the websites of individual P2P loans for more detailed information that can make your decision easier. In any case, P2P loans are practically always worthwhile, and since they don’t have to pay anything in advance, by submitting an application, you have nothing to lose.
Who are P2P loans for?
P2P non-bank loans are intended not only for those who want to borrow money, but are also a very interesting opportunity for those who have enough money and would like to invest them advantageously. So far, P2P loans are not so well-known on the Czech financial market and most people have not heard much about them. They are gradually becoming aware of this in our country and in the years to come their rise can be expected.
Who, on the other hand, are P2P loans?
On the client side, P2P loans are not for everyone. As investors try to minimize their risk, they do not lend to some too risky clients. So if you don’t have any provable income, you have a record in the debtor’s register or you have been charged with execution, you will most likely not get the loan.
P2P loans – interest, fees and total cost of credit
The actual amount of interest rates, fees and total costs depends on many factors, but it is substantial that it is lower than similar bank loans. P2P loans are cheaper for more creditworthy clients, while those with higher default risk are slightly higher. Overall, P2P loans are certainly a very interesting alternative to classic loans, and it will be very interesting to see how this part of the market will evolve in the coming years.