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For whom is the payday loan solution?

For whom is the payday loan solution? Drastic selection, high rates: banking establishments do not facilitate access to consumer credit. But what many French people do not know is that they can lend money to each other, with many advantages, without going through a bank. The story is on

What is the loan between individuals?

The practice of loans between individuals (PAP) or peer to peer lending (p2p) developed in the United States after the subprime scandal and is experiencing a growing craze in France. It generally involves asking a small amount (less than 10,000 dollars) from an individual, for a repayment period that varies between 3 and 5 years.

This type of loan represents a solution for those who find it difficult to borrow, especially when the family circle cannot help them. These are conventional contracts, which are similar to those that an individual can sign with his bank when he seeks to borrow. Some rules remain to be observed, however:

  • the rate of pay must comply with the limit on usury rates, the thresholds of which are published at the end of each quarter;
  • the loan is to be declared to the taxes.

A loan between individuals, the solution for those who have forgotten their credit

Banks are showing more and more reluctance to grant loans and require substantial income and/or a stable professional situation. Access to consumer credit is often complicated for:

  • a person on the RSA, whose income is deemed too low by the banks;
  • a retiree, whose income is falling and whose age is a concern for traditional lending institutions;
  • a temporary worker, whose income fluctuation does not meet the criteria for bank stability;
  • an unemployed person, whose situation is considered too risky;
  • an employee on a fixed-term contract, whose solvency will be a problem at the end of their contract;
  • a person in a prohibited banking situation, to whom access to credit is effectively blocked.

It is in this kind of situation that the loan between individuals can prove to be particularly useful since it simplifies the procedures in particular by limiting the supporting documents to be provided. Those who have difficulty obtaining an agreement to buy back a credit or a loan can borrow again.

A loan between individuals, the solution for a yield investment

If the borrower can see his interest, the investor is not outdone. With a higher return of around 5% gross on your savings, investing in this type of loan is much more profitable than traditional types of investments.

Lending to individuals also means participating in the real economy, a more concrete investment than stock market speculation. It meets an objective of solidarity between individuals.

However, be careful: direct lending between individuals is not without risk! Going through an approved intermediary is much more secure: this is called collaborative credit.

Difference between collaborative loans and loans between individuals?

It is easy to confuse the two terms:

  • collaborative loans such as those granted by Fine Bank, the only online platform approved by the Prudential Control and Resolution Authority (ACPR), differ from those of a “direct” loan platform between individuals;
  • with collaborative credit, there is no direct contact between lenders and borrowers. The funds are invested in the platform, which pools risks. We are talking about a community of investors who “lend” to a community of borrowers.

Another notable difference? In the case of loans between individuals, these must be registered with the taxes, an acknowledgment of debts must be established and you will have to be wary of the swindle and check that the lender will not disappear after he has obtained your money especially when the transaction is made on the web.

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