Recently, there have been many ads on the internet for websites offering social loans. There are several portals on the market dealing with such online loans, but there are also ones that have already withdrawn from further activity. Are social loans profitable?
Several websites offering social loans have been operating on the internet for some time. With the help of such services, you can get a cash loan on attractive terms. First, however, you need to gain trust and convince investors.
Internet portals offering social lending are created for both potential borrowers and people with financial surpluses – i.e. lenders. Everyone can become such an investor.
To apply for a social loan you must register on the website. To start with, you need to specify what the loan will be used for (e.g. for car repairs, home repairs, furniture purchases, etc.). It is worth showing creativity at this stage, thanks to which we will interest investors in ourselves.
In the next step, specify the loan amount and the number of monthly installments. We also offer the loan interest rate – the higher it is, the greater the chance to find an investor. An important factor that affects our credibility with lenders is the description of the purpose of the loan, and therefore its purpose.
After completing the above information, set up a loan auction. You also need to pass verification and prove our credibility. This is done with some information about us to which a potential investor has access. Simply put, to raise funds, simply place the auction on public view and convince the investor. It depends on him whether we receive money or not.
Lender or investor
To become a lender, you must register on the website as an investor. These types of loans have quite high-interest rates, so you can earn a lot. However, this involves some risk and the investor may not get back the money invested. To reduce the risk of loss, he must carefully choose the person he is going to borrow. To this end, the portal provides information on potential borrowers, which include:
- other users’ recommendations,
- rating (usually on a star scale),
- timely repayments,
- number of loans repaid,
- system verifications.
Social loans are an alternative to traditional bank deposits. This market allows investors to avoid commissions, margins, and costs that banks charge for brokering. Money earned through such a website goes to the pockets of lenders without any intermediaries. In return, however, they bear the considerable risk of recovering the capital invested.