Community Loans – Credits and investments between individuals
At Community, anyone with the appropriate level of solvency can apply for a loan, which will be financed by others like him who operate from the other side as investors. Thus, the profitability that a bank normally obtains for a personal loan is distributed by Community among the individuals who exercise this role.
Who can ask for a loan in Community
Any natural person of legal age and resident in Spain can apply for a loan. Companies cannot take advantage of this service as a financing formula, although they can benefit from others, such as the promissory note discount, which Community also manages.
From these first basic requirements, there are others that must be fulfilled for the approval of the loan, which are summarized in presenting a set of labor and family-family circumstances that configure a low risk profile and that offer sufficient guarantees. This profile is the one that Community will study if the request is pre-approved, in which case you will be asked to send the supporting documentation that is needed to make the appropriate checks.
How much can be requested
The minimum amount for a loan granted by Community is 600 USD, although this amount can go up to 8,000 USD, which is the credit limit that is offered. The term and interest are variable, but while the first factor is decided by the applicant among the possibilities offered (6, 12, 24, 36 and 48 months), the second is at the discretion of Community depending on the degree of solvency. What present. Typically, these interests range between 8 and 17 percent.
To establish this degree of solvency, Community requires the sending of certain documentation. In the case of being an employee, it will consist of a photocopy of the DNI on both sides, a copy of the income tax declaration (IRPF), a bank statement of the last 90 days of the account where usually They pay you the payroll and a copy of the last three payrolls received.
If you are self-employed, in addition to the DNI and the income statement, you must attach the last 3 supporting documents for installment payments (form 130/131) or VAT, copy of your working life (failing that, registration in the IAE and the last two receipts of the self-employed payment ) and a bank statement of the main account of your activity during the last three months.
With all this information, the application will be rejected or approved, and in the latter case, a risk level, A, B or C, will be assigned, which will affect the interest to be paid. The higher the risk, the higher interest you will have to pay for the loan. The approximate period of time to obtain a response from Community is two days.
The conditions to apply for a loan are demanding, since it is Community’s responsibility to guarantee that the individuals who decide to act as investors have the adequate level of guarantees for their money.
If after this exhaustive study your application is approved, there remains a second part of the process, getting investors to finance it. It should not be forgotten that the function of Community is, mainly, to carry out intermediation functions between investors and borrowers, establishing the necessary guarantees and mechanisms so that the entire process is conducted normally and smoothly. This means that some get the money they need and others the return they expect.
Precisely because of the demanding requirements and the depth of the previous study, obtaining the financing of the loans is not a difficult task. Investors usually diversify by investing in many different loans as a way to minimize risks, so the fact that a client has been considered level C (higher risk level) is not going to be an insurmountable problem.
Level C customers pay higher interest, which means a higher return for the investor. Therefore, according to the usual practice of diversifying investment in different loans, individuals usually establish a portfolio with investments in clients of all three types. Part of its investments are destined to loans with the maximum guarantees but less interest, another to those with a higher risk and a more profitable return, and a third to those who maintain a balance between both aspects.
Once the investors finance 80% of the requested credit, the client will be able to dispose of their money.
Once in possession of the cash, the client must make the corresponding payment on the 1st of each month
Advantages of requesting a loan from Community
We have already seen how Community works. Is it the best option for a personal loan in your situation? Only you can answer that question, but what has become clear are the advantages of requesting it by this means.
The interest rate is similar to that which could be obtained through a bank, however the process is more agile and faster. This does not mean that the risk analysis is more lax, on the contrary. It should not be forgotten that Community is also made up of investors who from the other side finance the loans and who must also respond to them.
On the other hand, applying for a loan in Community does not entail notary fees, and in case of payment problems, you can always negotiate a new payment schedule adapted to the new situation. With all this in mind, Community can be a good way out for both those who need money and those who want to give theirs a good return. If yours is one of these cases, visit Community and find out more in depth.