The small credit solution is perfectly suited to unforeseen expenses and quick projects. Indeed, when your washing machine breaks down in the middle of planning a wedding, for example, you risk quickly losing your footing in all these expenses. Thus, in addition to the small credit, it is possible to borrow from individuals. We will decipher all of this in what follows.
Borrow a small amount online
The loan between individuals (PAP), of its English name “Peer-to-peer lending”, originated in the United States. It is the result of several years of banking scandals that have severely shaken Americans’ confidence in their banking system. This so-called collaborative economy appears in the form of an online platform and seriously competes with traditional loans, for several reasons including:
- The constraint of paperwork;
- Lack of financial and economic strength;
- The rise in unemployment;
- The growing figures of financial insecurity.
This alternative, therefore, lends a small amount of money loan without banking intermediation. However, this is not a simple round trip to the lender, but a real Consumer credit with all that is required as conditions for getting the loan, rates, deadlines, etc.
Since the lender actually commits his personal funds, this type of loan is subject to the drafting of a contract containing the loan amount, its duration, the repayment terms and the interest rates which are optional. After agreeing on the conditions, the two parties decide on the form of the contract: the loan agreement or recognition of debt.
What is small credit?
A small credit is an interesting option when you have an urgent need for money to deal with the unexpected. It is a consumer credit, offered by banks and existing in several forms depending on the borrower’s situation, the repayment period and the amount to be borrowed.
This involves borrowing a variable amount from a bank. It is therefore possible to use only one part of the amount knowing that the interest will only apply on that part. Having no end date, this credit is reconstituted by the monthly payments stipulated in the contract.
The personal loan
The difference between the personal loan and the revolving credit lies in the fact that one ends with the payment of the last monthly payment while the other remains open indefinitely. Also, regardless of the amount used of the personal loan, the borrower must repay the entire amount and interest is applied to the full amount.
Personal loan without proof
This does not mean borrowing by a simple request, but rather borrowing without stating the reason for taking such a loan. It is an interesting solution for making purchases without knowing the beneficiary in advance; for instance, taking a loan for traveling or buying a car from a private individual. This type of small credit provides for a start date and an end date for reimbursement.
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