What are Personal Payday Loans?
Personal payday loans are those that are formalized among equals. There are several keys to know if personal payday loans are your best option. We tell you!
Collaborative business models have been established in most economic sectors. Traditionally the financial market was controlled by and for a small sector of the population. Personal payday loans have democratized investment and financing by promoting a fairer model. This has allowed, currently, anyone can access profitability and products with better conditions.
We explain everything related to peer loans, from their origin to the present, the different types of personal payday platforms and the main characteristics that characterize investment and crowdlending financing. But to start, we explain what it is and why this denomination.
What are Personal Payday Loans?
Personal payday loans are loans between companies or individuals. That is, companies or individuals that need financing request it through intermediary platforms, and other companies or individuals that are registered on these platforms, lend the money to the applicants. These will return the money to the lenders usually month to month, returning capital and interest.
It is a new and less new form of financing in our country.
Good Finance has already financed more than 60 million euros between companies and investors
Therefore, the main characteristic of peer to peer or crowdlending loans is the origin of the funds. In personal payday loans the funds come from private investors or companies.
Crowdlending (personal payday modality par excellence) encompasses two types of loans or main modalities, personal payday loans and crowdlending for companies. We explain the main types of loans.
Personal Payday loans
In loans between individuals or loans between persons, both the loan applicant and the investors are natural persons.
Crowdlending Personal Payday for companies
Crowdlending is the activity by which companies access financing through the contribution of individuals or other companies. Crowdlending investors obtain a return in the form of an interest rate in exchange for lending their money to companies.
Now that we know what personal payday loans are, let’s learn more about them.
Origin of Personal Payday loans
To correctly understand the operation of this alternative investment and financing modality, it is necessary to understand its meaning well. Therefore it refers to a peer relationship. The personal payday loan platforms, as we told you before, are the ones that directly connect both parties.
- On the one hand, individuals or companies access the financing they need.
- On the other hand, private investors or other companies get a return on their money.
Peer to peer loans originates in the United States and the United Kingdom. Both countries are world benchmarks of crowdlending. The Anglo-Saxon market, a pioneer in Europe, has established the legal and formal basis for the development of this new alternative market. Crowdlending maintains positive and exponential growth rates. Below we explain the case of Spain.
Personal Payday loans Spain
In Spain, pioneer platforms such as Good Finance emerged by identifying a gap in the Spanish market. The companies could not access traditional financing since the banking entities had halted the granting of loans. In turn, investors were increasingly struggling to obtain an attractive return on their money. Under this context, and with the Anglo-Saxon market as a reference, several platforms began to consolidate as an alternative to traditional banks.
Good Finance began to take shape in 2013 but did not start its activity until 2015. Year in which it obtained the appropriate licenses to operate. Good Finance Loans is the only personal payday platform in the Spanish market with two licenses:
Why invest in Personal Payday loans?
Online loan platforms allow several advantages for both investors and companies. We tell you.
Advantages of investing in Personal Payday loans
- Existence of different types of products to diversify
- No commissions to the investor. In the case of Good Finance does not charge any commission to the investor.
- Greater profitability Through peer to peer platforms they can access more advantageous conditions.
- Investors will receive their monthly installment composed of capital and interest.
Advantages Personal Payday loans for business financing
- Comfort. They are online loans so they are requested without displacements. Everything is done through the participatory financing platform.
- Diversify funding sources.
- No additional products. The contracting of linked products is not required through Good Finance.
- Free amortizations. Good Finance does not charge for early or total or partial repayments.
- No hidden fees, small print, and reduced management fees.