Private lenders serve as an alternative to traditional financing. However, before turning to one it is necessary to know the risks and have advice. We will tell you about the dangers.
When we think of a loan we usually think in banking terms. If we need money, we go to the bank or we look for other options through comparators or rankings with the best loans by category like the ones we update every month in this blog. If these alternatives do not convince us or if we are denied the money it is usually time to consider other alternatives such as quick loans and the like that are so much advertised lately on television and the Internet.
There are those who want to go further and look for loans between individuals, for which there are already platforms such as Comunitae. The problem is that not all loans between individuals are as clean as those of this platform.
The figure of the usurer is not new in Spain and, in fact, there are laws that prevent usury and establish when a loan has such consideration. However, private moneylenders exist and will always exist. According to QVCredit Singapore, the key at this point is to know how to identify which ones to trust. In principle, there is nothing wrong with a person who is in the business of lending money, as long as he or she does so in accordance with the law and with reasonable conditions.
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The problem is that many private loans are signed by people in a precarious economic situation who need the money at all costs. Private lenders know this and take advantage of it to achieve conditions that border on usury and even abound in it.
What are the rules governing loans between individuals?
The first thing to bear in mind when signing a loan of these characteristics is that as consumers we are protected by law, which may place restrictions on the conditions of the loan itself.
The problem is that in this type of loan and in all those signed in Spain, in general, the borrower will be liable for the loan with all his present and future assets. In other words, even a private loan without a mortgage guarantee can result in the seizure and foreclosure of the property.
The Law also distinguishes between mortgage intermediaries, who are those who negotiate on behalf of the client with the bank or mediate between the bank and the financial institution in some way, and professional private lenders, who are those who actually lend their own money or that of third parties.
The latter must be registered with the Consumer Institute, which registers private moneylenders and makes it possible to know whether a person is a professional or an illegal loan shark. The problem is that to this day this registry of private moneylenders is still not published on the Consumer website.
Who should go to a private lender?
People without a paycheck, since banks will not grant loans to people who cannot justify their income.
People who need money urgently. If we need the money for the next hours, going to the private capital will be your best option, since the lenders are usually fast in the concession.
Those people who need to unify debts, joining all of them, thus creating a new loan with two great advantages, since now we will have to pay only one installment and less money per month because the term is stretched.
Those who have been rejected by the bank for any other reason.