Private Loans – How not to be fooled?

Where did private loans come from? In a model situation, if we need additional money, we go to a bank or loan company. In practice, many people have a negative credit history (delays in paying off other liabilities) and can forget about the loan.

This is when we start looking for popular “loans without BIK”, i.e. offers from loan companies that either do not verify in debtors’ databases or accept arrears.

Unfortunately, many customers even in such companies will not receive a loan. A court bailiff, low creditworthiness or over-indebtedness are standing in the way . That’s when the frantic search for “private loans” begins as the last resort.

Private loan – (after) what is it?

Private loan

Let’s start with the definition. A private loan is a loan that is not provided by a bank or loan company , and by private lenders often called “investors”.

In the sense of a broad private loan, it can also be from people close to you – family members or friends. However, in this case the risk of any fraud is negligible. The main threat is private loans over the Internet provided by people unknown to us.

For whom private loans

loans

In the current opinion, private loans are available to indebted persons and without verification at BIK . What does reality look like? Private investors may actually not check clients in any databases, such as Credit Information Bureau or KRD.

But there is nothing for free – in exchange for accepting a bad credit history, the lender will ask for high interest rates, commissions or fees , and above all, additional collateral in the form of movable or immovable property.

The same applies to the lack of creditworthiness. It even happens that a private investor accepts the lack of employment of a potential client. However, this does not result from a “good heart”, but rather from solid security. In the case of non-repayment of debt (depending on the contract and security), it can be quickly satisfied by:

1) acquisition of movable/immovable property

2) demanding repayment from the guarantor

3) refer the case to debt collection

4) transfer the case to the court and then the court enforcement officer.

What is worse, private investors pay very much to debt enforcement. In the case of even a few-day delay in repayment, we can expect a phone call from debt collection and even meeting eye-to-eye with an employee of the field debt collection. It is also not uncommon to visit the workplace, frequent telephone calls and text messages reminding you of repayment.

Very high risk of fraud

Very high risk of fraud

Before we get any private loan, we’ll have to search our offers. Most often this is done via the Internet, where “private investors” mainly advertise.

Another way is to charge too high interest, commission or other fees that exceed the maximum loan cost specified in the anti-usury law.

For many scammers, quick private loans are also a way to take over the assets of a person who decides to make such a product and is unable to pay off the debt. It is about situations in which the loan is secured by real estate (flat, house, plot) or movable property (car, tractor, machines). The security itself is not prohibited and is often used by the banks themselves. The problem arises when the lender uses the client’s involuntary position and forces him to sign an unfavorable contract that assumes “an incommensurate mutual benefit”. This behavior is referred to as usury and is punishable by imprisonment for up to three years.

Another method of cheating is to scam personal data . Mainly it’s about name, surname, PESEL number, e-mail address, address of residence. The fraud may take a different form, but the assumption is one – the “investor” does not intend to grant any loan, it is only for our personal data. For this reason, his offer looks so good that it is hard to believe. What are our personal details about the fraudsters? In the best case, we will be attacked with loan offers (e-mails, SMS messages). It may happen, however, that the fraudsters will want to take out a loan themselves – this time using our data.