What are P2P loans ◾ What are their advantages? Which companies provide them? ◾ Is it possible to get a P2P loan without a registry?
The abbreviation P2P is based on the English term “peer to peer” and refers to a way of borrowing, where people borrow directly from people, not from a bank or non-banking company.
P2P loan is based on the relationship of the citizen – a loan applicant and citizen – investor who wants to grant loans to the value of their savings. This relationship is ensured and regulated by a parent company that handles the entire loan process.
Advantages of P2P loans
- Low interest rates
- Safety and clarity
- Possibility to refuse the investor
The indisputable advantage of P2P loans is low interest rates for borrowers (cheaper than at banks) or the possibility to refuse an investor’s offer free of charge if it does not suit you.
In addition, we can name attributes such as security or transparency, which is taken care of P2P companies that provide these loans to people and act as a loan administrator. Neither of the parties to the credit relationship need to worry about the security of their personal data.
Requirements for applicants
To apply for a Person-to-Person Loan, the client must meet the following prerequisites:
- Age at least 18 years
- Permanent residence in the Czech Republic
- Regular income
To apply for a P2P loan, it is therefore necessary to present an identity card and proof of income (as a rule, a statement of movement on a bank account is sufficient).
Are P2P loans without a registry?
Negative records in registers tend to be a problem for banks and some non-banking companies; Each applicant for a loan is so-called overstated, ie its creditworthiness and ability to repay the loan is ascertained. The applicant is usually assessed (eg by the letter A – F). “A” means that it is a hassle-free client with regular income and clean registers, “F” denotes a risky client with registry entries, possibly after a recent execution.
The investor then decides which clients to lend their money to. It may also opt for a “F” risk applicant. There, the risk is offset by higher interest rates – the investor takes more risk and may lose more but also gain more.
Which P2P companies operate in our country
There are several P2P companies operating in the Czech Republic:
Well-known P2P company licensed by the Fine National Bank offering loans in the range of USD 20,000 to 750,000, with an annual interest of 3.99% pa The company does not keep hidden fees, but requires a one-time fee of 2%. In cooperation with the insurance company Maxine, ZAnk is able to provide insurance of the ability to repay. The yield for investors is up to 6.03% pa.
The advantage is zero hidden fees, money is highly appreciated by the lender. Various types of loans are offered (with / without proof of income, with / without register control, loan with / without collateral), and various amounts from USD 10,000 to 500,000, with an annual interest of 9% pa.
• Yellow melon
The company charges a certain percentage of the loan received as a fee for obtaining it. It offers various types of loans for applicants with higher and lower creditworthiness.
• Banking online
Member of the FNB’s register of small-scale payment service providers. The company receives a fee of 1.5% for each loan already drawn. It also charges loan administration fees of 0.8% of each installment.
The company is also registered with the FNB. It is necessary to count on the fee for the mediated loan, on the other hand, it is possible to repay the loan early without sanctions. It is not necessary to have a prestige account.
P2P Credit Company, registered with the FNB. At present, unfortunately, it no longer provides new loans and limited its activity to the management and administration of existing loans.
How to Invest in P2P Loans |
If you have available funds and want to invest through P2P systems, register on the website of your chosen company, fill in your personal information, and choose in which applications submitted by applicants you want to invest. The applicant then accepts or rejects it. If it accepts it, the company will draw up a contract for both parties.
Money transfer as well as payment of installments is more or less dependent on the company. Some companies require transactions to be made directly to the relevant Investor / Applicant P2P site accounts, others do not.