The credit drought of recent years has led to the proliferation of alternatives to traditional financing that have grown rapidly in our country. Increased competition and improved freedom of choice for people are favored in a market that was previously limited to traditional financial institutions. Although this growth has opened the door to numerous offers, you have to carefully evaluate and choose the safest and most attractive one.
Today, citizens can satisfy their need for credit through three main channels: fast loans, traditional banks and peer-to-peer (P2P) lending platforms. The former represent a solution to cover an urgent need for money, but the obligation to pay the entire credit in minimum payments, its high interest rates and commissions can become a problem in the event of default.
Citizens are turning to P2P loans to finance their personal projects
Reform the house, pay for their studies, carry out medical treatment, etc. Banks, the traditional alternative, have in recent years been particularly strict and restrictive in granting consumer credits. On the opposite side, P2P loan platforms allow individuals to invest in other citizens’ loan projects. These new proposals have the advantage of operating completely online, thus eliminating relevant costs for its users, such as the additional charges for amortizing the loan ahead of schedule and allowing multiple fixed repayment terms.
More and more citizens turn to these platforms to finance their personal projects: to reform the house, pay for their studies, carry out medical treatment, etc. With these financing alternatives, users already have the possibility to access credits online quickly and without having to leave their home. So much so that the amount of money lent through them in 2013 has increased globally by 121% over the previous year, according to the Peer-to-Peer Finance Association (P2PFA).
Which financing option to choose?
With this wide range of financing options, the problem for the consumer arises when identifying, from among the many offers that exist in the market, the one that best suits the needs of each one. In such a way that requesting a loan (which a priori seems somewhat simple), can lead to confusion due to the breadth of the offer and the variety of conditions of the different loans and entities.
For all this, you must take into account some basic aspects that ensure that the process of requesting a loan comes to fruition. For this, it is key to analyze the requirements and the way of operating of each entity. Citizens must not forget that access to money is not immediate. We recommend carrying out a previous solvency analysis and knowing what is going to be paid month by month. It is also very important to find out about all the terms and conditions, especially on the subject of commissions. It is a golden rule not to sign anything that is not understood.
Loan repayment in the scheduled terms
If the borrower is aware that, due to unforeseen circumstances, he cannot repay the loan in the scheduled terms, he should never wait for the last moment to communicate it. The ideal option is to negotiate a solution satisfactory to both parties.
Following all these tips, the experience with this new form of financing can be very satisfactory. P2P loans, as part of the new vein of the collaborative economy, have already demonstrated the many advantages they offer compared to other options, especially in terms of fairer prices. This new form of financing is based on an online operating model that eliminates many of the costs of a traditional bank. In this way, the objective of redistributing part of the savings to investors and borrowers is achieved.