Mr.Credit – Loan Guide

You may already know that knowing your way around credit can be challenging, whether you are looking for a personal loan, a mortgage, or a good leasing deal. If you need a small amount of money quickly, consider borrowing from an individual who lends money with a bad credit history.

At first glance, this idea seems quite reasonable if someone near you is willing to lend you the money on their terms. But rarely does anyone think about the risks you may face in such a deal and the details you need to pay attention to to avoid problems in the future. Today, we will discuss how to borrow money from private individuals.

When is it worth borrowing from relatives?

Of course, everyone is different. Some people are used to asking their relatives for financial help whenever needed. Others, however, will try until the last minute to solve their problems, even by taking their previous item from home to a pawnshop. 

However, it is worth considering when it is better to borrow from a neighbor and when to ask for a loan, for example. Life experience shows that loans of up to € 500 with a bad credit history are often requested directly from people close to you. However, if an entrepreneur opens his own business and offers his friends or relatives to contribute, this can also be called a request for a loan. But it is more like investing. 

When people agree to pay off a loan by selling expensive items, this is also a loan between individuals. However, we recommend borrowing from official lenders because it is transparent, without unnecessary explanations to people, and with as much money as possible than a friend or relative will offer you.

Option B – fast loans for debtors

If you are suddenly considering asking people for money rather than approaching lenders because you have debts or a less than “clean” credit history, we recommend that you do not jump to conclusions. Yes, any creditor will check your credit history anyway, but some are confident of a good credit history and have a loan with a bad credit history.

Loan comparator NetCredit knows where you can get a loan with a bad credit history. They have compiled all the types of loans, terms and conditions, and other details just for you, so you can easily find out where you should apply for a loan and where you might not. Their site has loan options even for debtors with Sefinance reviews and people abroad who have left Ferratum reviews, so take a look and apply, and you may be approved for a loan.

By doing this, you won’t have to go to people and ask to borrow money just because you prematurely think you won’t get a loan. A calm and fast disbursement of funds will save you the worry of asking someone for money. And if you’re worried about overpaying interest, here’s a secret: even your friend can ask you to pay back 2 or 3 times more than you borrowed if he wants to.

How do I borrow money from a private person?

However, if no lender here or anywhere else will lend to you with a bad credit history, your only chance of solving your financial difficulties is probably with the help of someone you know. At first, I just turned up and asked for a few tens or hundreds of euros; he gave it to me, and then I gave it back out of my salary. However, people even have to declare the loans to the SRS.

In addition, the situations are different; the amount of debt is different, and the private lender must have guarantees. Today, if it is not €10 (although this amount can also be agreed in writing), it is possible to conclude a loan agreement. Of course, verbal agreements also make sense, but it is still essential to be sure and to have everything on paper. It can also include clauses on what the consequences of non-repayment will be and what the interest and repayment terms will be.

“It’s just a debt from a friend – I may never pay it back!”

At first, the friend/neighbor/brother can wait until you have the spare money to pay the debt, and you can postpone it for several months in the hope of getting a fair hearing. However, this is different! The so-called lender can sue you, even if you owe 15-20 euros. Even if you have not signed any documents, correspondence and possibly recorded phone calls can serve as proof in court that a transaction in the form of a debt has taken place between you. 

We advise you not to neglect the kindness of your relatives because if you do not repay the debt, you will not only damage your relationship with them, but you will also face possible criminal prosecution and various expenses such as court costs, moral damages, penalty interest, and stamp duties, which will already cost dozens of times more than this small debt.

Quick credit or a loan from a person – the choice is yours

Earlier in this article, we looked at the consequences of borrowing money from a friend and when choosing a loan from an individual is better. We also found out where you should apply for a loan to avoid having to explain why you might need the money. 

In the following, we will show you, in a summarised way, the pros and cons of deciding whether to take out a loan or to borrow:

Criteria	Loan from a person	Loan from a lender
Interest	usually none, but the amount varies from person to person	legally fixed, pre-defined, permanent
Terms and conditions	against the borrower, usually none, but the essential relationship and explanation of the purpose for spending money	vary between lenders but are standardized, with no private issues
Amount	usually limited depending on the lender’s capacity	typically large and sufficient for any purpose
Repayment terms	often rushed, tend to be negotiated in person, maybe rescheduled	mostly long, fixed, and unrushed, with extension possibilities
Regulation	low and based on personal agreement, loan conditionality can be changed at will	legal, based on consumer protection
Get money	maybe delayed depending on the amount	no matter how large the amount, it can be received within 15 minutes

Based on this comparison, you can decide how best to proceed. You can either turn to your relatives or use an official source of credit, possibly with overpaid interest. Whatever you get, remember that any debt must be repaid on time!