Credit without a bank is now a reality, here is all there to know about loans concluded without a banking entity, that is to say without bank, credit institution or broker.
Credit: the banking principle
In the traditional banking mechanism, a borrower having a project of real estate purchase or personal purchase within the framework of a consumer loan will turn to a credit organization, to his bank or possibly a broker. Credit is said to be bank when the funds come from a banking entity, that is to say a credit institution which borrows from the bank at a lower rate (usury rate) and offers this money to a borrower with a higher rate. This is how banks make money on banking products. From now on, it is possible to borrow without the banks, with the loan mechanisms between individuals in particular.
Credit without a bank: principle
The loan without bank is a loan concluded with an entity other than bank, that is to say an individual (we speak of loan between individual here) or possibly an investor. The principle remains the same as for the bank except that it is the individual who sets its conditions, the amount often does not exceed several thousand dollars, so the loan without bank is limited to personal projects, which can be financed by loans for consumption in a classic mechanism. Once the loan conditions are defined (rate, duration, amount, interest), a contract is established between the two parties with the repayment conditions (monthly, quarterly, annual repayment) and the loan of money can take place. The other solution is to use lending platforms between individuals, it is a company that connects lenders (investors, individuals with funds, annuitants) and individuals seeking credit. A contract is also drawn up and very often, all of this strongly resembles the mechanism of banks except that the funds do not come from a bank.
Is it interesting to make a loan without the banks?
Credit without a bank is aimed at more at individuals who are not very receptive to the banking mechanism or who have been refused a loan following their financial situation (late payments, late rentals, unpaid debts, etc.) but you should know that the Most of the peer to peer lending platforms as well as the individuals who lend the money are also looking at the borrower’s repayment capacity. It is an additional solution to take into account but for a specific need for money, an alternative which is often very useful for many French people each year.