The best alternative to Installment credit is a personal loan. If you do not want to install an installment loan with a bank, or if you can not borrow money from a bank for some reason, you can take out a personal loan.
For the borrower, a loan from individuals usually offers some benefits:
- the creditworthiness requirements are lower, so that money can be lent even with a negative Schufa entry
- The interest on a personal loan is often lower than the usual bank loan interest
- the repayment modalities can be arranged flexibly
Personal loan via a loan exchange
If there are no friends or relatives with a personal loan available, then there are online lenders like Smava or Auxmoney, which sell cheap personal loans. With the so-called peer-to-peer platforms, loan seekers hire their credit (eg 5000 Euro) with a detailed description of the project. The borrower must disclose his income to the online platform and provide evidence that he is able to pay the monthly installments. Self-employment requires the submission of annual financial statements or profit assessments. Only then will the project be published.
The more precise the description of the planned measures, the greater the likelihood of finding sponsors for a loan of € 5,000 from home. Potential financiers now have the opportunity to lend money to the loan seeker. In doing so, you benefit from the interest rates, which are generally much higher than the capital market rates for a traditional investment. A big advantage for the lender is that both lending and repayment are monitored by the lending exchange. Total losses in a personal loan are unlikely, according to the platforms. If the borrower does not meet his installment obligations, the defaults will be forwarded to a collection agency.
What are the advantages of personal loans?