Recently we saw a very nice video about borrowing money on the internet. This time about borrowing money without a bank. In our opinion, the video is a disguised commercial for the provider of this form of borrowing money. But there is certainly something in it. More and more people are tired of the banking culture and are looking for other providers of loans than the “normal” banks.
Borrow money without a bank? What are the risks?
As rightly indicated in the video, there is no difference between borrowing from a bank or a loan in the form of crowdfunding from one or more private individuals. The only risk that you run when receiving the loan is that you cannot repay the loan or cannot repay it on time. This may mean that extra costs will be charged, and that borrowing money will cost you even more than just the interest on the loan. Borrowing money with a bank is actually an even greater risk than borrowing money without a bank. With a loan from the bank, your loan will also be CRO tested and registered. This will not happen in all cases when borrowing money without a bank.
Is borrowing money cheaper without a bank?
We ourselves think that the “real” interest rates are not discussed in the video that has been put online. We did have a look at the website for this. And we immediately noticed that only the nominal interest is mentioned. This is different from the regular lenders, where one must always correctly indicate what the effective interest is. However, these nominal interest rates are quite competitive. The problem, however, is that it apparently takes a long time to get the money. There is a period of 14 days for “filling up” the investment for a loan. We have tracked them for you, but none of these loans have ever been fully written.
Risk for the lender / investor
In addition to the risks for the person who is going to borrow the money. Are there also risks for the person who lends the money. The investor. This is because if the investor does not repay his / her loan. Then you, as an investor, have lost your money. So always be careful when investing in these types of projects. There is no guarantee that you will actually get your money back. The advantage, of course, is that risks can also be offset by returns. Which consideration you make in this is and remains your own choice.