P2P platforms like Bestbank offer credit from private to private. The word credit is derived from the Latin terms credere and creditum and means something like “what is entrusted to faith”. Definitely, belief and trust was an essential point when it came to personal loans. It’s still a matter of trust these days, but certain regulations make it much easier for borrowers and investors. At Bestbank, the safe and smooth credit flow comes first.
Crowdlending by Bestbank’s private investors
So-called crowdlending has existed in Germany since 2007 – it is enjoying growing popularity. The market leader is the online credit marketplace Bestbank, which has set itself the task of bringing private loan seekers together with private investors. In fact, private investor confidence and trust play a much greater role in this type of loan than in bank lending. This is because the project that is being presented and the person behind it is in the foreground. First of all, interest must be aroused by the investor.
The marketplace for private to private loans
Bestbank is the market leader in Germany – the platform ranks fourth in Europe. The principle of the company is simple: Bestbank brings together private investors and private borrowers, Bestbank practically acts as an intermediary. On the one hand, there are the people who are looking for a loan for a project, on the other hand, private individuals want to invest their money as profitably as possible, practically creating a win-win situation. Both parties benefit from the collaboration.
What are the specific tasks of a P2P loan platform?
The saying goes: trust is good, control is better. Private investors need a healthy foundation of security before investing in a private loan. With the credit information, Bestbank makes it easier for investors to decide in which project it is worth investing. However, this preliminary check is not carried out using the standards used by a bank. Ultimately, Bestbank filters out 80% of all credit inquiries during this check and does not allow them at all.
As a P2P credit platform, Bestbank has its own credit rating, the Bestbank score, which takes up to 300 score criteria into account when assessing creditworthiness. If you have registered as an Bestbank investor, you can view this information from the loan seekers and get an idea of it for yourself.
For whom is private investors worthwhile?
At first, the quota of those who are not even allowed to enter the marketplace sounds very high. However, it would be even higher at a bank. The loan from private investors is primarily worthwhile for people who have little or no chance of getting a loan from banks.
This includes the self-employed, start-ups, students or people with low incomes. On the other hand, if you present your concerns on Bestbank sensibly, you have good prospects of being able to access the online marketplace.
What is the return for the private investor at Bestbank?
The maxim applies to high returns: the higher the risk, the higher the return. After the credit check, Bestbank determines the interest rate with which the loan application is combined. A lower credit rating will earn higher interest. This in turn benefits private investors if they want to invest in the project. With Bestbank you can achieve an average return of 5.0%.
With the portfolio builder from Bestbank it is also automatically possible to invest your money in several projects, the investment amount is spread. Here, Bestbank’s private investor is advised to exchange ideas with the borrower before making his decision. As a private investor, you should also be aware that the spread of the investment amount provides greater security. Through this diversification, practically the spread of the investment amount, it is possible to let your money work for you quite easily and automatically.
Conclusion for Bestbank investors
Crowdlending can be a winning situation for everyone involved. The loan seeker can realize his project and the private Bestbank investor can make a profitable investment. They can do this manually or use the Bestbank portfolio builder to automatically invest in loan projects.