Borrow more often from family, friends and strangers

According to the Netherlands Authority for the Financial Markets (AFM), more and more money is borrowed from friends, family or strangers. There are no official figures, but the AFM has found that banks are approached less often. Notaries also see that more and more loans are taken out without the involvement of a bank.

Borrow more often from strangers
Borrow more often from strangers

One of the reasons why loans are taken out less often with banks is crowdfunding. There are numerous sites where individuals can borrow money from complete strangers. This is done on the basis of trust. As a borrower you then pay a reasonably high interest . This is 6 to 8.5 percent. A well-known, larger crowdfunding site has already raised 35 million US dollars in investments for borrowers.

However, lending money through a crowdfunding site is not entirely without risk. The Royal Dutch Association of Civil-law Notaries also warns against this. As a lender you have no security whatsoever. It is better to have the loan agreements recorded at a notary.

The AFM believes this method of borrowing is a good development, but at the same time it also warns against the risks. The crowdfunding sites do screen their borrowers, but they do so in a less professional way than banks. People who borrow through a crowdfunding site often cannot get a loan from a bank. This often has a reason, such as a negative BKR code . It is important that lenders realize this.

Crowdfunding is a godsend
Crowdfunding is a real godsend for many people. For example, last year Marcel Benschop placed an appeal on a crowdfunding site to lend him money for the construction of a house. He did not receive a mortgage from the bank, but 31 private investors presented themselves online within fifteen minutes. Benschop was able to borrow 20,000 US dollars.

Published on September 19, 2014 at 3:12 PM by the editors .

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