Borrowing money without a bank: the options

Private lending is borrowing money without a bank

In this article you can read all about the various options on how you can borrow money as a private person without the intervention of a bank. This type of loan is also called a private loan.

If you want to borrow privately, there are various options for doing this. Many private money loans are offered via the internet, so you will always succeed. Where exactly can you go?

Borrowing official money without BKR control

Borrowing official money without BKR control

A good option is to borrow money as a private individual without BKR control. So if you want certainty and no hassle, and you don’t want a check at the BKR, consider a mini loan. That provides clarity, overview, trust and your friends and family do not need to know that you borrow money. So in a way also anonymous. View what a mini loan without BKR check entails:

With a mini loan you can borrow up to 1500 euros without a BKR check. In this way you can still borrow money without having to use a bank and without checking whether you have payment arrears.

Borrowing private money, preferably with a contract

Borrowing private money, preferably with a contract

If you still want to borrow money without any intervention from a body such as the provider of a mini loan, then it is always wise to use a contract for private loans. Have everything well put on paper so that both parties are obliged to comply with the agreed agreements. This applies to both the lender and the person who has to repay the money. Do not assume that an oral agreement is sufficient for a private loan, because in practice this often appears to cause problems, because verbal agreements are often (partially) forgotten, whether they have understood the agreement differently than intended.

Mutually, there are usually some more flexible agreements to be made with a private loan than the agreements that you can make with an accredited lender. This makes private lending attractive and is therefore the reason that private lending is common.

Borrow within your social circle

If you want to borrow money from someone from your own social (friends) circle, it is important to put the agreements clearly on paper. You are not the only one who fails to do so when borrowing money privately, which later causes the biggest arguments about borrowed money. Because even if you think you know someone so well, if money is involved, people can sometimes change. Be wise if you borrow privately and put all agreements on paper.

Practical example of a loan with friends and family

The following practical example shows that borrowing within your social circle does not have to turn out badly with friends and family:

Once upon a time there were 2 people who wanted to take over a company from a franchise chain. The company was entirely based on the supply of products from other parts of the country, organized by the franchise chain. However, the 2 entrepreneurs wanted to run the business themselves and start making their own products, because purchasing products produced elsewhere was much more expensive. This was not a good idea for the franchise chain and gave the entrepreneurs the opportunity to take over the business and thereby step out of the franchise. However, starting the business had taken all the necessary steps and therefore no extra money could be borrowed from a bank to buy out of the franchise.

A request was then made to family and friends within their social circle. This was explained what the situation was and together with a financial overview everyone was asked if, and if so, how much they would want to lend to the company. An expensive machine, purchased for self-production of the products, was used as collateral.

As a reward, an interest rate was given that was well above the current savings rate. This was done to motivate people to lend money to these people. With the value of the machine as collateral or guarantee. Of course everything was recorded on paper and signed as an official document by both parties. This is a valid document. An example of a similar loan contract can be downloaded here.

Download the sample contract for private lending of money here (PDF)

The result was that the company was able to receive the required amount within 2 to 3 days from various friends and family. The company was able to restart as an independent company without being connected to the franchise chain and without the intervention of a bank.

This really happened story indicates that borrowing within your social circle, from friends and family, is definitely worth investigating. If you end up in a similar situation, this is the ideal way to borrow money, without the intervention of a bank, where you may no longer be able to go.

Borrowing private money online

Always pay attention when borrowing privately on the internet, because you would not be the first to be scammed this way. All kinds of smart tricks are used via the internet to get out of lending agreements. Borrowing privately from a stranger (via the internet) has a fairly bad name and borrowing in this way entails a risk.

In general, borrowing money from a competent authority is the most responsible and the safest. An official contract will be drawn up and all options will be discussed with you in advance. With a recognized body, you know where you stand, unlike with a private loan. When borrowing money from a private individual, everything can of course also go smoothly and as agreed, but we still hear stories where the private loan was not the best option. So think carefully before you start a private loan.

Benefits of private lending

  • Often the money is available quickly
  • No verification at the BKR Bureau for Credit Registration
  • Make agreements yourself about repayments, possibly variable repayments or at intervals
  • No penalty for early repayment

Disadvantages of private lending

  • Interest is often higher than with an official lender
  • Draw up and sign an agreement yourself
  • Borrowing acquaintances or family can put pressure on the mutual relationship
  • Less privacy, your family or friends from whom you borrow partly know your financial situation

Record the conditions for private lending well

The conditions that you set yourself with a private loan are very important. What do you agree if you cannot pay off the loan on time? Or what does the lender demand of you as collateral or measure if you cannot meet the obligations? Prevent a fight or worse by recording this properly. Of course, it remains a risk for the lender to lend money to someone who already has a BKR registration and who may not have a fixed income. And for you as a money borrower, it remains a risk if you do not repay everything on time. The costs can rise uncontrollably in the form of extra interest or fines, or other measures are taken that you do not want.

Borrow small amount without hassle with a mini loan

Borrow small amount without hassle with a mini loan

With a mini loan you can easily and quickly borrow a small amount without the hassle. You take out the loan within 10 minutes, after which the amount can be in your account within 24 hours. With such lenders you know at least where you stand, something that is often not the case with privately borrowing money. With a mini loan you can borrow money from 100 to 1500 euros, for most people this loan form is therefore ideal.

Borrow money without BKR control

Most people looking for a private loan fear being checked by a real lender for a registration in the BKR register. However, the providers of mini-loans do not perform this check, so you can safely borrow from these parties.

If you do have a BKR registration yourself, it is very difficult or impossible to get a loan through an official lender. The BKR always checks your situation in their system. You can also request your BKR registration online to see how you are doing in the Central Credit Information System (CKI).

If this registration is “negative”, no additional loan is allowed in your name. This happens in particular when applying for a personal loan or a revolving credit. These are loans where relatively higher amounts can be borrowed and that are not available through a mini loan.

It is very important that you do not continue to work yourself into debt and possibly end up in debt restructuring. The BKR ensures this by registering all loans that are taken out.

In certain situations, a mini-loan can be more useful to quickly get a smaller amount for unforeseen circumstances.

Private loan through open trade

There are various open-trade platforms on the internet where individuals can borrow money from other individuals. These money platforms are more official than a completely private loan. An official agreement is used in which everything is properly laid down. Think of the interest, repayment and duration that they agree with each other. It is also the case that a certain amount required is funded by several people so that the lenders do not have to bear the risk alone. A loan issued for 20,000 euros that is financed by 20 different people would theoretically pose a risk of just 1,000 euros per person if everyone pays the same amount. 

Simply borrowing money from an official bank is not that expensive at all

Don’t you dare to take the risk of privately borrowing money? And do you still want certainty and support from an official bank? Then compare the lenders in our overview, and request quotes from various providers without obligation and free of charge. A BKR assessment is always done here, but it could be that you can still get a regular loan because there is still room in what you can borrow to the maximum. No you have, yes you can get you just have to think.

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