The so-called Personal Payday credits, or credits between people are increasingly known in our country. But what do they consist of? How do they work? How can they be requested? We tell you everything in this post.
Personal Payday Credits: What are they?
Personal Payday credits or loans between individuals is a new way of financing and investing. Through this alternative financing, people and companies get financing directly from other people who lend them their money. Between the borrower and the investor there is a Personal Payday platform, which through the internet is responsible for putting them in contact and executing the mandates of both parties.
In summary, through Personal Payday loans borrowers obtain financing in the form of loans directly from other people who lend them their money, all through an internet platform. Good Finance offers Personal Payday service for investors who want to lend their money to companies in exchange for profitability.
Are Personal Payday credits regulated in Spain?
Yes. Law 5/2015, of April 27, on the promotion of business financing, regulates this activity under the heading of Participatory Financing Platforms, which is the name that the regulator has given to companies that carry out Personal Payday credits .
Under this law, any platform that wants to provide the service of loans between individuals, Personal Payday credits or participatory financing (all these terms refer to the same), must obtain an authorization from the National Securities Market Commission (CNMV).
Recently Good Finance has obtained such authorization, which allows us to offer the Personal Payday credit service with total security for our clients. If you want to have more information about this law, check this blog post.
Personal Payday Credit vs. Bank credit
The main difference between a bank credit and the financing of a Personal Payday credit is the origin of the funds, since in the case of the first one, the money is contributed by a financial institution with a bank file, and in the Personal Payday credits, the funds are contributed For a diversity of individuals .
For example, a Personal Payday loan can be participated by more than 50 investors and it is here that the role of the platform that articulates them comes into play, since it is responsible for managing the money of all of them, charging the SME the fees corresponding to the loan and distribute it among all investors.
For these steps, Good Finance has the Payment Entity license No. 6869 granted by the Bank of Spain.
Personal Payday Credit: Advantages for the applicant company
When an individual or company is financed with a loan or Personal Payday loan, it obtains financing with the following advantages:
- Personal Payday credits without displacements since everything is done online through the participatory financing platform.
- Very short procedures . The processing of the request is extremely agile and the company obtains a response within 48 hours of completing the request in the case of Good Finance.
- Without additional products : no additional products or services must be purchased
- Does not consume CIRBE .
- Free amortizations . In the case of Good Finance, companies will be able to repay their Personal Payday credit both totally and partially for free.
The investor in Personal Payday credits
Investment in loans between individuals is a way of generating attractive interests because it offers the investor the profitability that until now was reserved for banks. More and more people choose to make their money profitable by lending it directly and in exchange for an interest rate to other people or companies.
Platforms like Good Finance offer investors the possibility to easily create a diversified loan portfolio, which is generating an attractive return, in addition to the satisfaction of knowing that their money is contributing to finance the real economy.