Private lending? Often an advance is requested first

Is it wise to borrow money from a private person? The advertisements on the internet promise a cheap loan with a standard low interest rate of 4.5%. Within 24 hours you will receive a quote and what it costs exactly. Is this possible you ask yourself? The reality is (of course) different. An interest rate of 4.5% is only calculated if you borrow a minimum of 25,000 euros. To be eligible for such a large loan you must have a good income and not a negative BKR rating. 

Negative BKR listing

Negative BKR listing

Online banks will also be unable to do much with a negative BKR listing. An application for a credit from a website is usually forwarded to a lender. This bank assesses your application on the basis of your debts + your payment behavior. The bank can see this by consulting the BKR’s large database. All loans and credits that are higher than 500 euros are recorded therein. This also includes mail order orders, credit card purchases and telephone credits. The moment the bank sees that you are behind in repaying or have been in arrears (in the last 5 years) then your chances of a loan have run out.

Borrow money from private individuals

Borrow money from private individuals

A random advertisement on a fora reads: I am a private lender who lends money to people who cannot go to the bank for a loan and have a negative BKR code. You will then be asked to contact us. This loan also contains two reviews that leave nothing clear: a half star (of 5 stars). The reason for the bad review is that the lender from the advertisement first asks for money before he can transfer the loan. It is clear that you should not comment on this. Unfortunately, it is the practice for private lending. The lender asks for money in advance (type of costs) before he can process the application. The moment you transfer the money, there is little chance that you will hear from the private borrower.

Debts negotiable

Debts negotiable

A former football player who is now a manager at a football club recently came in the news when it became known that he had made large debts with private lending. A portion of the debt was paid, but a large portion had not. This part was traded to other creditors who are now going to claim the claims. Private creditors are not known to properly comply with the legal rules. Private lending is therefore not a good solution if you have debts.

Credit bank and mini loan

Credit bank and mini loan

If you have a debt of a few thousand euros, it is best to go to the municipal credit bank. These banks are governed by the government. Even with a negative BKR rating you can usually go there. For example, the credit bank can combine all small debts into a joint loan from the credit bank. This bank also charges a less high interest rate. Do you want to save the administrative hassle and do it on your own? Then consider a mini loan. A normal mini loan is up to 800 euros. People who have a good track record can also borrow 1500 euros. A mini loan must be fully repaid within 30 days. You must therefore properly assess whether you can repay all the money within 30 days.

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