What you need to know about the regulations governing peer-to-peer credit

Posted on June 24, 2020
credit regulations between individuals

Many French people are currently opting for credit between individuals for their financing needs. It is easy to obtain credit, but you still need to know its inner workings, the regulations that govern it as well as the various risks that you can run.

Credit without a bank: how much must be declared?

The loan between individuals is the solution that best suits people who want to make a loan without a bank. However, there are many reporting obligations that must be applied to act legally. According to the explanations of Marianne Tordeux, lawyer at the Court, "it is imperative, for the borrower, to declare to the tax authorities any loan higher than 760 us dollars on a form attached to the declaration of income" . These regulations are also applied if during a year, a borrower has had access to several small personal loans of an amount greater or less than 760 us dollars for a total which always exceeds the limit amount.

And if it is a peer 2 peer with interest, the lender is obliged to make a declaration of the interest received also on its annual tax return. Especially since an acknowledgment of debt must be part of the loan application files for a loan between individuals amounting to more than 1500 us dollars .

What to expect after forgetting to declare a loan between individuals?

For an undeclared peer-to-peer loan, you may incur a tax fine of US $ 150, and it does not depend on the cost of the loan. Also according to the lawyer of the Court, it is possible to be the subject of criminal sanctions, but with a limited risk. But as regards the François Fillon affair, "in the absence of declaration of the loan to the tax authorities, the latter could consider that it is a donation rather than a loan". And Marianne Tordeux continues by saying that "This donation should be subject to gift tax at the rate of 60%, to which could be added late interest at the rate of 4.80% per year, and penalties for failure to declare" .

What about the zero rate loan made between relatives?

Credit between individuals can be carried out between relatives, without any interest rate being applied. According to the explanations of the lawyer at the Court Xavier Philippe Gruswez: “The rate to be applied depends on the agreement of the two parties. However, it must not exceed the thresholds decreed by law ” . To give you an idea of ​​what can be achieved, the maximum rate granted for a loan between individuals that does not exceed 3,000 us dollars is 20.35%.

The online credit solution

To avoid disputes with loans between individuals, it is better to opt for online credit offers. This is the case with the solution available on pret-personnel-en-ligne.net, an online comparator site that acts as a peer 2 peer platform, thus putting you in contact with people with credit offers between individuals, by applying legal and simplified administrative procedures. To access it, start by making an online simulation of the amount you hope to obtain as a loan between individuals and the repayment period which is often limited between 3 to 5 years, and then compare the quotes to find the loan proposal without bank that's right for you.