The rules on loans between individuals

Real financial windfall in these times of crisis, the loan between individuals is no less a framed operation. Whether you’re borrowing from your brother-in-law, or going through online intermediaries, some rules must be scrupulously respected to avoid being sued. What are these rules and what is waiting for you in case of non-compliance? Zoom on the rules that surround the loan between individuals.

The wear rate, not to be exceeded


An individual can lend money to another person for a fee. If the parties are free to set the interest rate, it should not be usurious. Setting this threshold is not always obvious. But to be simple, refer to the rates charged for the personal loan of banks. Be careful because wear and tear is an offense punishable by a fine and a prison sentence.

Writing, a mandatory term


This type of loan may be constituted by private deed or by deed before the notary. Writing is the undeniable proof of the existence of the bond relationship. There are some mandatory mentions to give full force to the contract. These include the complete identity of the parties, the agreed sum and the rate agreed upon for borrowing money. Whether the contract was handwritten or not, the parties must affix with their own hands the words read and approved. Beyond 1500 €, the borrower will have to establish an acknowledgment of debts.

Tax reporting, when and how?


The borrower has the obligation to declare to the tax authorities any loan higher than 760 €. This ceiling takes into consideration all of the loans obtained. To split a loan is therefore useless. The lender is also subject to a declaration when the loan has an interest rate. This remuneration will be recorded in his income and will be subject to income tax. Failure to report to the tax authorities can result in a fine of a few hundred €. But it can also translate into consideration of the loan as a gift. In this case, the tax applied will be that of the gift which is still 60% currently.

What about online intermediaries?

This is the trend of the moment, competing strongly with bank loan offers. Indeed, thanks to the absence of a physical seat and employees like the bank, these intermediaries offer loans at very low rates. But these intermediaries must be registered in the ORIAS register. Operating exclusively online, it is increasingly difficult to check all sites that offer loans between individuals. Many have already been victims of theft and identity theft. These scammers 2.0 focus on the distress of vulnerable people to remove confidential information, banking but also personal. It is important to remain vigilant and to be wary as much as possible of the wonderful offers. Above all, you should never disclose sensitive information on the net.

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