•   Friday, April 23, 2021
Finance

Social loans - what are they and how to use them?

Social loans, apart from bank loans and private loans, are one of the most popular sources of raising money. This is an ideal way to connect people in need of funds with people in surplus who want to invest them. Why gain both people? How do these loans work? What requirements must be met in order to obtain such a loan? You will find all this information and useful information later in this article.

What are social loans?

Social loans are a novelty that has been present on the Polish market for some time. It consists in associating people who want to borrow cash with those who want to multiply their capital. The agreement is concluded between these persons, the investor pays out the money to the borrower and receives it back in installments with interest. A few years have shown that this is a good and relatively safe way to borrow and invest money. Of course, there is some risk for those who borrow money, but it is minimised by detailed verification. It is also a price for much higher profits that can be achieved in comparison with a bank deposit. The service earns money by charging commissions on each loan granted.

On the popular Internet comparison engines, the user can compare all the conditions of current financial product offers and choose the most profitable option for himself.

What conditions must be met in order to obtain such a loan?

In order to receive a social loan - that is, from a private person with whom we are connected by a portal - we must meet similar conditions to those of private companies or banks. There are usually several methods of proving their credibility, and the more we meet them, the more willing lenders will be to lend us money. The requirements to be met include: verification of identity, address of residence, income, type of work or credit history.

If we verify only the same address and identity, we may not receive a loan or only get a few proposals. If we document our source of income or positive history in BIK, we will be able to choose from many options and offers.

Why is this a win-win situation for both people?

Social lending is much more beneficial for both borrowers and lenders. The former will receive a loan on very attractive terms, paying much lower interest rates, and the lender will gain a much higher profit than on a bank deposit. The whole process is also very simple and fast. Its popularity is also influenced by the large number of websites enabling the conclusion of such a transaction. Verification, withdrawal and refund of money is quick and easy.

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