Who needs a loan, is usually dependent on a bank or a bank. A loan without a bank is only possible in the private sector. However, anyone who does not have the opportunity to receive a loan within the family or the circle of acquaintances, the loan seeker has little chance to get a loan from outsiders. Too big is the uncertainty about the creditworthiness and too much the risk of total credit loss, which would lead to expensive and unpleasant legal disputes.
Private intermediary for a loan without bank
In order to facilitate the search for a loan without a bank and to place it on a legally sound basis, in recent years there has been an increasing number of switching platforms that bring private borrowers and lenders together.
The former offer the opportunity to obtain a loan without a bank, the latter can profitably invest surplus money and at the same time support other people in achieving their financial goals. The platforms themselves make profits by charging a brokerage fee, which is usually a percentage of the mediated loan amount.
The biggest and best known of these platforms are creditend and auxmoney. Both work on a similar principle. Loan seekers register on the respective website and in the case of creditend are subjected to a comprehensive credit check after identification by a branch of Swiss Post. For this purpose, an insight into the credit bureau file is taken. The calculated credit bureau score is listed in the profile of the borrower and determines the maximum loan amount that he may borrow.
However, no such audit is conducted by auxmoney. Although the loan seeker can be financially examined by a cooperating bank against payment of a fee, he is not obligated to do so. However, participants who refrain from such a review will, in the eyes of most lenders, present an increased risk of default and only get credit without a bank at elevated interest rates.
At creditend, the borrower chooses the desired interest rate himself, as well as the repayment term. Depending on the credit bureau score determined, however, it would only be possible to find lenders who are actually prepared to grant a loan, even if the interest rate is appropriate for the default risk. However, a single donor does not have to cover the entire amount. Partial amounts are also possible and the loan seeker has two weeks to find enough financial backers to realize his loan request.
Different pricing models
The minimum loan amount granted to creditend is 500 USD. A maximum of 25,000 USD can be obtained as a loan. Upon successful mediation, creditend charges the borrower a fee of 1 percent of the total. For sponsors, participation is free. With auxmoney the attitude of a loan application costs 9.95 USD, which is retained also with Nichterfolg. For mediation, a fee of 0.95 percent of the loan amount is charged.
Limited investor protection
In the case of a payment default, the customer is reminded by creditend several times before the claim is sold to a collection agency. The funders are protected from total catastrophe through a pool of investors where individual losses are shared by a group of investors. With auxmoney this security does not exist. The company may, but does not have to, hire a collection agency to collect the installments.
A loan without bank is not equivalent to a credit without credit rating. Although a mandatory review of the credit bureau file does not take place in the case of auxmoney, it is difficult to find a financier without proven creditworthiness.