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Loans between individuals

Written by Administrator Monday, 27 June 2011 15:42

Launched in the U.S. for several months, some sites already claimed hundreds of thousands of members.
To date, the loan between individuals has led to nearly 100 million between individuals.

With family or friends, loans of money should not be a source of conflict. For this, one solution: Addressing a "lender" and do everything in writing. To borrow a sum of money, there is no requirement to apply to a financial institution. Most often this happens in a friendly or family.
Few would formalize the transaction in writing then ... and many people who bitterly regret!
It is essential to perform certain procedures for this type of loan. Otherwise, it can be much more difficult to recover the amounts due.

The French do not know but they have the opportunity to lend money to each other.

Advice

Financial institutions offer many loans with rates often prohibitive.
The fees usually amount to 1% of the amount borrowed with a minimum and a maximum following institutions.
Care must be taken to facilities that you announce charges before tax (VAT) and so give you some nice surprises in reading your contracts.


By allowing to provide paperwork to individuals so they can realize their own financing, they can find a non negligible interest in setting their own baths and conditions, notament on rates, the duration and the amounts involved .
In most cases it remains the prerogative of the lender.

Legal limits rate in 2010:

For a consumer loan greater than € 1 524: 19.44%
For a cash reserve or a park: 20.63%
Installment loan for less than € 1 524: 21.59%
For the average home loan is 3.68%
For a loan professional is the average rate of 5%

Today it is possible gifts to lend money at rates ranging from 2% (booklet) up 20.13%.
Why leave us to the banks the privilege of debt, we can lend to investors who need money.
This requires collateral on the borrower:

- Identity. (Photocopy of identity card)
- Adressse debit.
- Photocopy of payslip.
- Proposed purchase.

When you lend money to someone, it is better to have written evidence to justify the debt. So you must add a reference to certain criteria that IOU is effective. The borrower must itself perform manually the IOU. You should know that it is mandatory for civil if the loan amount is greater than 1500 euros. The IOU must be dated and signed by both parties.

It must be established in three copies, one for the plaintiff, one for the lender and also one that will complete the registration.
When lending money to a friend or a family member, it is sometimes better to mention this loan in writing not to encounter problems later.
The existence of an IOU can avoid going to court in case of bad faith on the part of the applicant or the borrower.
When writing an IOU, indicate the terms of repayment. If nothing is specified, we can demand repayment of debt after sending a formal notice. If despite this money is not made, the litigation is inevitable.
If the amount is less than 4000 euros, this approach is fairly easy. However, if it is between 4,001 euros and 10,000 euros, the district court to be seized. If the amount exceeds 10 000 euros to this point, it is necessary to hire a lawyer because the case will be captured by the High Court.

Loans between individuals are subject to the rules of the loan in general:

- Their compensation is free (within the limits of the rate of wear)
- Above the amount of € 760, writing a note, specifying the terms of repayment is mandatory and results in tax liability reporting.

Reporting tax obligations

Before 15 February of the year following the loan:

- You must declare to the tax authorities ready than 760 euros, even if not formalized in writing, on a form No 2062 "Declaration of the loan agreement", available for download on this site or in a tax office.
If the same creditor or a debtor has consented or even obtained during a given calendar year, several loans of unit or less 760 euros, but the total principal exceeds this limit, all loans must be reported by the creditor or debtor, it is not possible to circumvent this requirement by splitting a loan into several loans below this limit.

- If the loan was made, with interest, you must report the amount on Form No. 2561, left on your site or a local tax.

Also, if you're the lender, you must declare the interest on your tax return, under the heading of income from capital.

If you owe the lender and the solidarity tax on wealth (ISF), the loan is a debt that must be included in your taxable assets.
Conversely, if you are a borrower and taxable to the ISF, you can deduct the loan from your taxable assets.

Usual conditions

I lend money to a friend, neighbor, colleague ..... What to do?

You've got to establish a written, even with friends.
He justifies the release of funds, said the loan terms (interest rate or not, repayment terms ...), and facilitates the recovery of the loan to default. This writing may take the form of an IOU or a mortgage notarized.

The choice between these two agreements depends on the size of the amount loaned and the risk that you intend to run. If you opt for an IOU, the act may be established under private and in as many copies as there are parties. It should be marked in the handwriting of the debtor of the amount due, in words and figures.

The recording of that Act to the tax is optional. Its sole aim of giving a date certain. It has drawbacks. If your debtor is uncooperative, you have to go to court to take protective measures, because it is a private document.

On the other hand have the quality of unsecured creditor, all other creditors, and preferred mortgages, are repaid first. If you have preferred to establish a mortgage contract notarized, you get a mortgage.

Whatever the nature of the act, the following tax formalities must be completed:

By the borrower
- Declaration of the existence of the loan,
- Declaration of interest paid to the lender.

By the lender
- Declaration of interest received during the tax return.