Is consumer credit between individuals cheaper?
Credit between individuals is a major development axis following the financial crisis. But does it really exist in France? And is credit between individuals cheaper than conventional consumer credit?
What is credit between individuals?
Credit between individuals is an alternative to consumer credit traditionally distributed by banks and credit organizations . Its principle consists in borrowing directly from individual “lenders”. In France, the legislation does not yet allow a mode of operation like this. The ability to lend money is governed by banking law and requires appropriate authorizations. It is however possible to obtain a loan from a family member or a friend, with or without declaration. We have listed the right way to use it in our article on personal loan.
However, there are formulas to approach a loan from individual to individual. The one that most closely resembles credit between individuals is the approach proposed by Younited Credit. This organization offers borrowers to apply for credit online as with any other conventional organization. You will choose the desired amount and duration and then complete an online credit questionnaire to find out if you are pre-accepted.
The difference with other financial organizations is that Younited Credit obtains the money it will lend you from individual “investors” and not from the financial markets. These particular investors will be able to choose to invest their money in funds which will be remunerated according to the duration of their investment. These funds are used to finance loans requested by borrowers.
It is therefore not credit between individuals proper but the mechanics are approaching and the risk for investors is limited. It is also an alternative which makes it possible to offer credit without the banks.
Is credit between individuals cheaper?
To judge if credit between individuals is cheaper than traditional credit, nothing is simpler: you only have to use our online credit comparator to get the answer . What we can tell you is that the answer is not systematic. In general, the rate of a loan depends mainly on the term over which you will borrow and to a lesser extent on the amount.
For example for a credit amount of 3000 USD, credit between individuals through Prêt d’Union is the cheapest 24 to 48 months from the day we write this article.
Credit between individuals: Scams are increasing
We have seen the proliferation of credit scams in the area of personal loans. On more and more forums, you will be able to see testimonies blooming from people indicating that no longer any bank wanted to trust them but that they met an individual who trusted them and who loaned them money.
All this is completely false. How to imagine that an individual who does not know the person will make a loan between individual to another person when in addition the banks do not want to follow. This kind of loan testimony between individuals has the sole purpose, in the best of cases, to collect an email but very often in the worst, to steal money from people in difficulty who have a need for money. These are scams. Do not reply to these messages, we refuse more than 2 per day on our site. You can react on our personal credit forum below.