A private loan, is that a good idea?

Normally you go to a bank if you need money to apply for a loan. But in some cases that is no longer possible. You may have been blacklisted because you have had payment problems in the past. Banks will then place you on that list so that you cannot apply for a new loan. Or because you already have too many loans, banks can also refuse you with a new application. Then it is advisable to first pay off those loans and then apply for a new one. If you can’t do anything else, you can also go for a private loan. It is a bit risky, but it can solve your financial problem.

Borrow money privately – is that a good idea?

Borrow money privately - is that a good idea?

If you are going to borrow privately, you borrow from an acquaintance, friend or family member. So there is no bank involved. You must of course realize that it can go wrong because there is no supervision. Both the borrower and you can withdraw at any time and then problems may arise. So it is certainly advisable to put everything clearly on paper. The person from whom you borrow can demand that a document state how many months have been agreed to make the repayment. As well as that a cost percentage has been charged. With late payments or no payments, measures can also be taken. If you borrow through a private loan, you therefore have the same obligations as with a bank. So it is not an easy way to get money.

Private loan

Private loan

If you are asked to give a private loan you have to think about it. This is about a person who is blacklisted or who already has too many loans. Does he then still have sufficient resources to take out another loan? The burden of paying off loans cannot be underestimated. It can really feel like a rock around your neck. And you also have other costs such as monthly shopping, heating, electricity, water and the like. So there is more to come and you have to be well aware of that.

If you nevertheless agree, then you must put everything properly on paper. And ensure that payments are always made on time. As soon as there is a late payment, you do not have to worry yet, but then you can already show a sharp response to the borrower. You are entitled to timely payments. Also include a cost percentage for late payments, should problems arise.