Where can I get a P2P loan?
P2P lending (crowdlending)
Crowdlending: lending without banks
The Internet was key to the development of P2P funding. The British platform Zopa started in 2005, followed by the US provider Prosper Marketplace in 2006. In Germany, eLolly entered the market in 2007, but could not hold up.
The outstanding feature of a P2P loan (English: peer-to-peer lending) is that banks are left out when it comes to lending. A borrower puts on a Loan brokerage platform, the Credit marketplace, submitted his request for funding. Interested investors can decide whether and to what extent they want to get involved. In the meantime, the credit marketplaces have diversified. In addition to the classic providers of personal loans, marketplaces have also been created specifically for the commercial sector, which also convey volumes in the seven-digit range.
P2P lending for individuals
A distinction is made between different variants of a peer-to-peer loan. In the commercial sector, there is talk of crowd investing or crowdfunding. The most common option among households is crowdlending. The borrower submits his application under an alias. In advance, he goes through a credit check, at the end of which he is classified in a certain credit rating. The credit rating class decides the amount of interest that he has to pay. Of course, the success of the loan application depends on how well the borrower and his project to be financed sell.
The loans are only financed by a lender in the rarest of cases. Usually they always are several investorsthat enable financing with partial amounts. Hence the term "crowdlending". Since the donors do not appear by name either, it could very well happen that a neighbor lends money to the other via a platform without them being aware of it.
The Credit rating does not play the most important role for all lenders when granting P2P loans. The lenders are private investors who are looking for higher interest rates than fixed-term deposits, but who do not want to risk the fluctuations in the price of stocks. Since they can also invest smaller amounts from 50 euros per loan, investors can put together loan portfolios with loans of different loan terms and interest rates or risk levels. If there is a default on a loan with a weaker credit rating with a deposit of 50 euros, this is less tragic.
The role of banks in P2P lending
The reason for the high level of acceptance of crowdlending is that traditional banks have gambled away their trust capital from many customers during the financial crisis. For borrowers and investors, credit marketplaces mean that they can conduct their financial transactions outside of the traditional financial industry. But even with a P2P loan, it is not entirely possible to do without banks. There are two reasons.
The disbursement and repayment of the loan cannot be made and processed by all parties involved. This requires a fiduciary participant who monitors both the disbursement of the loan and the proper repayment. Banks take on this task.
The legal situation in Germany
Anyone who repeatedly or commercially grants loans in Germany with the intention of making a profit is subject to supervision by BaFin under Section 32 of the German Banking Act (KWG). Now imagine if BaFin had to control all investors who invest 50 euros in a P2P loan once a month. On the other hand, users and operators of a credit platform make themselves liable to prosecution if they lend unauthorized funds or offer the opportunity to do so. To get around this, be Banks switched in between. These collect the investor money. They then bundle the loan to the borrower. The banks thus act as contractual partners for borrowers and lenders.
Benefits of P2P lending
Peer-to-peer loans offer a variety of benefits:
- Possibility of borrowing even with poor credit ratings.
- Access also possible for the self-employed.
- Portals specializing in specific markets for corporate loans.
- Attractive interest rates with monthly payments for investors.
- Risk minimization through smaller deposits in loans for weaker credit ratings.
- In Germany fiduciary processing by intermediary banks.
Disadvantages of P2P lending
Basically, there is only one disadvantage to a P2P loan: that Credit default risk. If, with a total investment volume of 5,000 euros, a lender decides to invest 100 euros in a loan with a higher probability of default, the risk of a loss of two percent of the entire investment remains manageable.
Start credit comparison now
With the Nowhere cheaper guarantee with Verivox you are on the safe side. If you receive a loan offer from a bank or a credit broker (including other comparison portals) that is cheaper than the cheapest comparable loan offer from Verivox, we will reimburse you the interest difference in the form of a one-off payment directly to your account if you take out the loan via Verivox .
Top interest rates with around 40% savings
Verivox customers saved in 2020 with an average 39.7% cheaper eff. Annual interest rate on average around 40% interest compared to the average German borrower (annual mean effective annual interest rate 5.82%, calculated from the monthly average interest rates for consumer installment loans of German banks for new business in 2020, source: Deutsche Bundesbank interest rate statistics from 02/09/2021)
- Fast acceptance and payment
Non-binding, free of charge and Schufa-neutral
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