Bad credit loans online- See our online loans for bad credit get deposited with you

A private payday loan is an alternative if a bank loan is not awarded or if no “official” debt is desired. However, important for private money lending without any bank is a good hedge for private individuals who act as borrowers and lenders. In addition, the question should be considered in advance: what happens if the repayment of personal payday loans is not secured?

See our online loans for bad credit get deposited with you

If the application for a payday loan for bad credit is rejected at the bank, a private loan from friends or relatives is an alternative. One speaks then of a personal payday loan of private persons since in this case, not the bank is the donors, but private people. If they do not want to get involved in lending money, so-called online platforms on the Internet can also be used by private people on the Internet – here, too, private individuals seek and mediate payday loans for bad credit.

Reasons to lend money to private individuals

In most cases, one of the following three points is the reason for accepting a loan from private individuals:

  • Creditworthiness does not exist.
  • Interest on a personal payday loan is lower (or falls away).
  • There is no additional debt desired.

So, if you have already taken out a loan or several loans and you do not want to go into further possible bad conditions or if you are not considered creditworthy by the bank (often freelancers and self-employed after start-up, people without regular income, trainees, pensioners and students) predestined for private credit providers.

Benefits of payday loans

The borrower benefits from several advantages when borrowing from home:

Free negotiation of the conditions

The terms are negotiated freely in a personal payday loan , legal requirements do not apply. Thus, the personal payday loan is usually significantly cheaper.

Lend money from private mostly without Bank and proof of income 

The Bank knows everything? No, because if it is a loan from a private person, there is no compulsion to credit check! A loan without proof of income, so to speak. The person from whom you borrow the money knows you and your financial situation. This credit does not have to be registered with the Bank, which leaves the creditworthiness of the borrower untouched.

First of all, it is the confidence of the borrower or the relationship between the private borrower and the lender. In some cases, however, documents must be presented that prove the security of the repayment, but this is rather the exception.

Agreement of individual securities

If any collateral is required, these can be arranged individually. An assignment of income or a valuable asset is not common.

Risks and Disadvantages of payday loans

Personal credit also carries risks that must be considered before signing the private loan agreement. The following points should be considered:

No protection

Even if collateral is agreed – consumer protection does not exist . A bank ombudsman or a consumer protection organization will not act in disputes.

Notice period as a problem

Without agreement on a fixed term, the lender can terminate the private loan with a three-month notice. The refund amount is due in one fell swoop.

Little information

Often, nobody knows exactly what he is getting into, because information duties do not have to be considered. Who z. B. the performance of a quick loan envisaged, has borrowed money between private individuals no certainty, whether this z. B. is really instructed by Sofortüberweisung. In general, it is advisable to consider setting up a loan agreement for all agreements and conditions.


Personal and close relationships can complicate the relationship borrower lender. Not for nothing it says: “Money destroys friendship”.

Loans from private individuals always with contract

The contractual basis to borrow money privately can even be agreed orally – experience shows: it is not recommended! A written contract should be concluded.

Here are the agreed terms held, repayment dates and collateral. In case of disputes the contract gives a certain security to the further procedure and to the liability. This is very important and should not be underestimated if it is to run seriously.

You have to pay attention to this with a loan from a private person

The key data in the contract should consider the following important points:

  • loan amount
  • interest rate
  • payment date
  • repayment date
  • collateral
  • running time
  • notice periods

Collateral such as the registration of a mortgage or a declaration of assignment can also be included here.

Interest and tax treatment on personal payday loans

If a private person lends a loan, the interest is freely negotiable, since in a private loan no one is bound by legal requirements. In the case of loans between friends and relatives, even the interest is often entirely waived.

If the loan is obtained from private individuals and taken via an online platform, the interest shown there is due. These are also free to negotiate and dependent on the requirements of the lenders. The private lender must state the interest received as income in the tax return (so-called income from capital assets). If the borrower declares the interest as operating expenses or expenses, the private lender must tax the received interest payments with his personal tax rate.