A distinction must be made between two basic cases of a loan from private individuals. A personal loan can be granted among friends and relatives or can be processed between unknown people through the intermediation of a service provider.
Private lending among friends and relatives is informal. In the case of higher sums, however, a written credit contract should be drawn up due to the required legal certainty. It should be noted that any interest is taxable. If the loan is granted to private individuals without interest being charged, gift tax may apply.
The entire loan amount is not considered a gift, but the value of the interest waiver. Most informal loans from private individuals to friends and relatives are carried out in small amounts that do not exceed the tax exemption limit for the gift.
In the case of brokered loans from private individuals, a full bank licensed by Astro Finance appears in addition to the brokerage platform for legal reasons. This processes the lending formally, but does not interfere in the decision on the lending. Rather, this is done exclusively by private individuals registered as lenders.
When making their decisions, they take into account the usual characteristics of creditworthiness to a much lesser extent than traditional banks. For most individuals, whether they want to support the stated purpose for the loan applied for is decisive for the approval of a loan request.
This also means that, unlike a bank loan, it is essential to specify the intended purpose. This also applies if the platform dispenses with this or is satisfied with general information. In order for the applicant to actually get the desired loan from private individuals, enough private lenders must sign their request. Otherwise, the credit request will be deleted from the platform as not approved after the specified time.
Experience has shown that requests for a loan from private individuals are the quickest to approve if the loan seeker describes the project for which he needs the money applied for as precisely as possible. In the case of smaller amounts, a private individual draws the entire sum; for larger amounts, the commitment is made by partial subscriptions from several private individuals.
Depending on the platform, different provisions apply to the provision of Credit bureau data for a private loan. A negative feature does not in any way preclude private lending, even if it is communicated to the lenders. The publication of a loan application on a brokerage platform, if requested, without specifying creditworthiness data makes less sense, since private lenders reward open and complete information.
Nobody has to be afraid of data protection difficulties with a mediated loan from private individuals. The brokerage platform and the bank officially acting as the lender are the only ones who know the data of private loan seekers and lenders. These only communicate with one another via a channel provided by the platform and do not learn their mutual addresses.
An organized loan from private individuals is not only easier to obtain than a conventional bank loan, but also cheaper. Furthermore, small loans that banks often do not offer due to the high processing costs are possible via the brokerage platforms. This type of borrowing is therefore not only suitable for frequently requested loan amounts, but also for small loans required in the three-digit amount.
The organized loan granted by private individuals is transferred to the bank account of the loan applicant, the later repayment rates go to the placement platform and are forwarded by this to the private lender (s).