People who need money and, in the opinion of the bank, do not have a sufficient credit history and cannot count on receiving funds from financial institutions, can take advantage of the still not very popular option, which is a social loan. All you need to do is go to the appropriate website, log in, go through the verification procedure, announce yourself and wait for the offer. And there are many of these. What exactly are social loans? Are they safe? These and other questions will be answered in the article below.
It started in England
Social lending, because this is the original name of the discussed idea, is a financial product that is already well known in Western European countries. Due to the fact that social loans have quickly found many supporters, both among borrowers and lenders, the possibility of using them appears in an increasing number of countries.
It all started in England, where Zopa.com made it possible for people to apply for a quick and cheap loan without leaving their home. The convenience and innovation of the idea made the website accepted and there were many who came out with a similar offer.
In Poland, services and loan products of this type appeared only in 2008. Since then, many portals have been created that mediate between investors, i.e. people who have capital "to sell" and borrowers who are looking for a source of obtaining money for some time.
What is social lending?
The idea of social loans is that individuals borrow money from each other.There is no intermediation of financial institutions here - a person who needs funds can find lenders on the Internet by logging in to the website created for this purpose. It sets the conditions for obtaining a certain amount, creating a kind of announcement that goes to the other party, i.e. investors.
All "advertisements" of potential borrowers are included in the so-called offer tables that lenders view. On the basis of various criteria, they make a decision to periodically transfer a certain amount of funds to the person who just needs it.
So, as you can see, the way social loans work is very simple and clear. Moreover, what attracts both sides of such transactions are their favorable terms - often much more profitable than in the case of loans granted by financial institutions. Low interest and interest rates, as well as the possibility of granting a loan to one person by several investors - are the main advantages of this solution.
Is social lending a safe solution?
Since social lending has so many advantages, why still relatively few people in Poland use this form of fundraising? It seems that the basic problem may be the lack of trust in loans granted via the Internet, and secondly, it is not known by whom or for whom.
What investors and borrowers can do to increase security is finding the right portal. Due to the fact that there are more and more websites that deal with this type of product, it is worth looking for those that have been on the market for some time and enjoy positive opinions.
In addition, it is worth paying attention to the registration procedure. Procedures that are to increase the security of transactions are, for example, obligatory sending of information from an ID card or providing an individual bank account number.
What's more, this type of service can grant rather low-budget loans - most portals set the maximum value of transactions concluded through them.
It should be remembered that social loans are very different from traditional loans granted by banks. The difference is primarily that in the case of social lending, the provisions of the Civil Code apply, and not other legal acts strictly related to financial institutions.
In summary, social loans are therefore a good solution, especially for people who do not have creditworthiness in a bank and need money "for now". Investors also have a good chance, as they can count on a return on investment at a similar level as banks. Due to the fact that social loans are based on the mutual trust of investors and borrowers, when looking for a portal that is to serve as an intermediary in this type of transactions, it is worth paying attention to the above-mentioned issues that testify to the level of security on a given website.