Money is not only available from the bank: personal loans when unemployed
If the bank turns the money on because of an insecure or low income, the privately owned loan for the unemployed, mini-jobbers, students, apprentices, self-employed, freelancers or retirees is an alternative that rightfully enjoys growing popularity. But one must not forget: This is not about a friendship service, but about a business. The conditions are accordingly.
The big internet family helps
Previously, family and friends were a first stop when it was financially jammed and a bank loan due to dark points in Schufa history or due to the current income situation was not in it. But hand on heart: who already likes to reveal people close to his money problems? And even if parents, siblings or colleagues really like to help, there can be unexpected problems with repayment. In the case of money, friendship literally stops, and it would be a great pity if a friendship breaks for money or breaks family ties.
The Internet is responsible for the fact that the principle of credit among friends can now also function among complete strangers. Previously important arguments against this form of financing, namely shame and concern about a burden on the personal relationship, fall away with it.
This is how personal credit works
Large intermediation platforms have specialized in the on-line private credit business for the unemployed and other people who have poor prospects in the banking system. Loan seekers can present their project, their loan request here. The more detailed they are, the more plausible the reason for borrowing and the more realistic the repayment planning is, the greater the likelihood that the loan will be provided.
On the other hand, there are investors who want to earn more interest than the meager sums that are available for safe investments such as overnight or fixed deposits. But higher interest rates also mean higher risk. Of course, the creditworthiness of the applicant is also examined in the case of personal loans. This is usually done by the switching platforms, and they then issue an interest recommendation. However, the award decision is solely in the hands of the individual investor.
Loan seekers need time
For reasons of spreading risk, investors only contribute to as many projects as possible with small amounts. Often plants are possible from 25 euros. A loan is only made when it is fully subscribed. For the applicant, who wants to finance 1,000 euros, this means that he has to convince up to forty investors of himself and his idea. So there is no lightning loan on the personal loan platforms. Also, the interest is not a bargain, and in financial difficulties is also reminded and enforced, as a bank would do that. The decisive advantage of private loans, however, is the flexible procurement practice, which does not rule out the unemployed and low-income earners in principle.