Saturday, September 19, 2020

What are P2P loans?

Peer-to-peer loans (P2P loans) are personal loans that come about between private individuals. The contact between borrower and investor is direct with this financing method, which means that traditional credit institutions are not involved. One form of P2P loan is crowdlending, in which a loan is granted by a large number of investors.

Especially in times of mistrust towards banks, P2P providers are becoming increasingly popular.

Especially in times of mistrust towards banks, P2P providers are becoming increasingly popular.

P2P loans via the Internet are therefore becoming increasingly lucrative for investors. Instead of borrowing money from the bank, more and more people are borrowing money from online credit marketplaces. Loan seekers therefore benefit from lower interest rates.

The financing methods of P2P loans or the peer-to-peer model also try to restore the social component of credit that has been left behind in the traditional banking world. Investors themselves determine, among other things:

  • … to whom you want to grant a loan
  • … for what purpose they grant the loan
  • … how much money you invest in a project

Accordingly, they can support projects that seem likeable and trustworthy to them. The principle of peer-to-peer credit is simplicity and directness. Because banks are locked out, personal loans can be arranged quickly and without red tape. Borrowing money privately and lending money privately is the trend.

P2P loans with Bestbank – quick and easy

P2P loans with auxmoney - quick and easy

Online P2P credit platforms like Bestbank are often presented as a countermovement to traditional banks. Rather, they are an alternative to banks. Bestbank has had experience in dealing with peer-to-peer loans since 2007 and is the largest German online credit marketplace. In addition, Bestbank is Germany’s best-known provider for crowdlending and thus also for P2P loans. The principle at Bestbank is clear: it tries to give every individual a loan.

For people who have not received a loan from the bank because their credit rating does not meet the benchmarks of the bank, P2P loans are a real alternative. As a result, anyone can hope to get a loan. For investors, on the other hand, lending money to a private individual is a profitable alternative to the bank.

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