Loans between individuals
When a user needs money to pay a large bill, start a particular project or pay the fees for their studies, they generally look for a loan that is safe, profitable, and reliable.
Following the increase in interest rates by conventional banks, coupled with the requirement to meet more and more requirements and provide more documentation, consumers have chosen to return to the system of loans between individuals.
On this page we will tell you more about loans between individuals, we will explain how it is possible to obtain them through the internet and we will detail their characteristics.
Loans between individuals: What they are and how they work
The main difference with the rest of the market loans is that in this case, the borrower is a private individual who has capital and not a financial entity.
Although loans between individuals have always been an option, they again gained popularity due to the financial crisis, when conventional banks began to increase their interest rates and demand more documentation from their users.
On the other hand, loans between individuals simplify the necessary procedures and requirements to the fullest, so that users can have the necessary financing with fair interests for both the lender and the borrower.
In this way, the operation of a loan between individuals is similar to that of a personal loan, with the difference that it is a natural person (or several) that lends money to another, establishing a specific duration and interest rate.
Is it safe to ask for loans between individuals by Bankate?
Bankate is a loan and credit comparator that offers you a completely updated list of the best financial products in the Spanish market.
Our service is completely independent of any financial institution, presenting the requirements, conditions, interests and advantages of each of the loans on our list, so you can easily compare them and find the most profitable for your situation.
The best? Our list not only shows you the beautiful part : we also tell you the disadvantages of each loan, and if there is any hidden expense or commission.
Bankate is completely reliable and safe, as it complies with all laws and regulations provided in the field of comparison services.
In addition, our service is free and non-binding : our goal is to help our users find private loans online that best suit them!
If you have questions about how Bankate works or what our business model is, you can visit How does Bankate work? or our Commercial Notice.
Frequently asked questions about loans between individuals
What are personal loans between individuals?
Loans between individuals or P2P are loans offered both for personal financing, such as paying off an invoice, and for financing companies or emerging projects.
How to make money loans between individuals?
Money loans between individuals can be done in many ways and some of them are as follows: between family members, with a private lender, through crowdlending platforms, etc.
Where are loans registered between individuals?
Although these types of loans are between individuals, the loans must be registered with the Public Treasury. Thus, this applies to all types of online credits.
What law regulates loans between individuals in Spain?
How can I apply for a loan between individuals online
Time needed: 20 minutes.
As for loans between online individuals, the steps to follow are very simple:
- Compare the different platforms
Compare to find out which one suits you best.
- Fill out a form
Complete the form with your details, amount and duration of the loan and purpose.
- The platform will study the request
It will carry out a solvency assessment, after which it will assign a risk factor, that is, the probability that the user will not return the loan.
- You will receive a loan offer
This offer will detail the interest to be paid, based on your solvency.
- The platform will raise the money
They will collect the money and they will send it to your account.
Types of loans between individuals: how do they differ?
There are different types of loans between individuals, depending on the purpose of the money, the amount to request and how to apply for them.
The main differentiation that we must make to classify the types of loans between individuals is whether the loan application is going to be made through the internet or in physical form.
Depending on this, we will have different options regarding factors such as the purpose of the money and the desired loan amount.
Loans between individuals physically
If we want to apply for a loan between individuals physically, we will have two options:
1) Go to a private lender
There are many agencies that put you in touch with an individual who wants to grant loans using their savings to make a profit on them.
This loan grant will always be made through a contract signed before a notary.
It is a very risky option, so you must ensure that everything is correct and safe before hiring this option.
2) Loans between family members
In many cases, family members can act as lenders in difficult situations.
These loans may or may not have interest, but they must always have a contract detailing a set amount and duration, after which the loan must be repaid.
If this does not happen, you could have problems with the Treasury, as it would be considered a covert donation. We tell you more in the ‘family loans’ section.
Loans between individuals through the Internet
If what you want is to contract a loan between individuals online, there are several platforms that put people in contact with investors who are willing to offer this money.
These platforms differ according to the nature of the loan and the purpose of the money:
Crowdlending platforms connect small businesses that need financing with investors who wish to provide it.
The particularity of this type of platforms is that the financing is carried out collectively, with different private investors who later receive the interest corresponding to the money they have lent, or shares of the company in question.
2) P2P online platforms
While the other option was aimed at companies, these platforms are mainly used to request private financing, by contacting people who need money with individuals who have that capital, paying later interest for the money borrowed.
These platforms keep a small percentage of the interest paid on the loan for having made intermediaries.
How can I apply for a loan between individuals without a physical guarantee?
Like the characteristics of the loans, the way to request a loan between individuals without collateral varies depending on the type of loan in which you are interested.
For loans between individuals physically hired, all you have to do is find a private individual or a family member who is willing to lend you the necessary money taking into account your situation and your personal economy.
After that, you must formalize a contract detailing the amount, duration and interest rate (if any) and sign it before a notary.
Keep in mind that for family loans there are specific conditions, as the contract must clearly detail the place and date of formalization, amount, duration, interest rate and personal data of both parties, so that the transaction is not considered a covert donation.
How much is paid for fast loans without collateral between online individuals?
The characteristics of fast loans without collateral between individuals are indefinite, and the requested amounts of $ 50 can reach around $ 50,000, with a duration of 5 years on average, although they can be even more extensive.
That is why it is complex to establish a specific interest rate. However, the rates are usually similar to those established by conventional banks when applying for the best loans with personal guarantee, ranging from 5% to 11% on average.
You should remember that the interest rates are established according to your solvency assessment and the risk factor involved in lending you money, so the higher the assigned risk factor, the more interest you must pay.
Most P2P platforms have a table on their website where you can know the interest to be paid depending on the different levels of risk, or you can use their loan simulator to know what it will cost to hire a loan with them.
In addition to this, online platforms will charge a small percentage as intermediaries, varying between 1% and 6%.
Are there loans between individuals without interest?
Loans between private individuals without interest exist. On many occasions parents are forced to guarantee their children to deal with the purchase of a home or other situations such as simply helping a friend to make a payment for some unforeseen event.
In this type of loans between individuals, such as between families or friends, there may be an agreement in which said loan does not have any interest.
It is important that all the information and details of the loan, as well as agreements in which there are no interests, appear in the contract.
Loans between family members: What should I consider?
Although a loan is formalized between two parties belonging to the same family, you must bear in mind that it is legally necessary to have a contract that records the transaction and the process in writing.
This contract must include the personal data of both parties, the amount borrowed and the duration of the loan, as well as an established interest rate, if any.
If you want to formalize an interest-free loan contract, it is recommended to specify in that same document that it is a free loan, so that it is not considered a covert donation.
To avoid any misunderstanding with the Tax Agency, the best idea is to register the loan contract, including a stamp of this institution, and present it in the income statement.
Are loans between private individuals without mortgage guarantee possible?
If you have debts or are registered in the list of delinquents in Spain, it will be difficult to get money through loans between private individuals without mortgage guarantee. The request will only be viable if you have small debts.
With this kind of loans, you will not be able to access a large amount of money. Generally they are usually less than 6000 USD.
Is it safe to take out private loans between individuals online?
Although many users are doubtful when using a P2P platform to contract a private loan, the truth is that finding the right platform, the transaction is as safe as in a conventional bank.
As of Law 5/2015, these types of platforms are required to have an authorization from the National Securities Market Commission (CNMV) to practice as PFP platforms, with the approval of the Bank of Spain.
This means that these types of platforms are subject to a series of regulations established by the Bank of Spain, so the processing of a private loan through its services is completely secure.
Loans between individuals with credit institutions in Spain
There are private lenders that can solve your financing problems that are generally rejected by traditional banks.
These private lenders grant financing to people who are registered in the lists of walruses such as credit institutions and RAI in Spain.
After reading this page, you should remember that:
- Loans between individuals are offered to both individuals and businesses
- You can request a loan between individuals both physically and online
- The requirements of loans between individuals are simplified to the maximum
- The interests of your loan between individuals will be greater the higher your risk factor
- You should keep in mind that there are specific regulations regarding family loans so that they are legal
- P2P platforms are subject to regulations, so it is totally safe to contract a loan through them.