What are social loans?
Facebook, Instagram, Snapchat, Twitter … at present social networks are in the lead and enjoy unflagging popularity. They are mainly used to exchange information, they are a photo base, they are a platform for communication and getting to know or creating public opinion. For some time they have also fulfilled the role of a platform enabling borrowing and financial liabilities. How does it work? What are social loans and how to choose the optimal one tailored to our needs?
What is a social loan?
A substitute, equally popular name is a social loan, showing a special type of transaction, which is concluded between individuals and websites. The role of an intermediary between two parties gets vaguely blurred, thus facilitating and streamlining the process of granting and applying for a loan. This means that every user of the profile on social media can apply for and grant a loan. Importantly, the portal does not act as a guarantor and does not charge fees for such a transaction. The portal’s role is reduced to verifying users and providing a platform to finalize such operations.
How is this operation done? What is required of our profile and what should be done to receive a positive decision on the application? A person who sets up an account on social media must adapt the type of page to the requirements of the contract. The website’s administration checks the correctness of our data, verifying, among others, the credit history, calling it credible or unreliable. If we have paid our debts on time and we have no outstanding debts, our profile will be evaluated positively. Then, the entity seeking the loan issues its advertisement, signaling the willingness to take out the loan. It is often required to present the purpose and form of repayment of a given liability. Other registered users on the portal can show their willingness to provide financial support by granting us a loan according to pre-determined rules. Before they do this, they will assess us for credibility.
Loans granted have many points in common with loans from the bank. First of all = loans are granted for a specific period of time and for a specific percentage of interest. This means that the person giving us the loan has a real chance of earning. It is worth noting here that the interest rate is highly flexible, which in turn will be appreciated by the parties requesting and responding to our application. These conditions are often more convenient than those set by the bank.
Advantages of social loans
Let’s summarize the above information and think about what advantages they bring.
- high availability, enabling quick and informal commitments
- no complex, tedious and difficult formalities – starting with the documentation through the entire verification and inference process
- the commitment rules are set by compromise between both parties. In this way, you can set both the date and the percentage and rules
- this is an ideal place for lenders whose goal is to multiply their capital
- an alternative for people who don’t want to borrow in the classic way
In the case of defects, questionable security and relatively small amounts are most often mentioned, which we can count on in the form of loans. Large amounts are not given willingly and often, mainly for fear of the reliability and credibility of the parties. To this end, it is best to check social loans ranking, which illustrate the most optimal and most convenient offer for our expectations and possibilities.