The loan between individuals, a new form of credit without a bank
Since this loan of money is accomplished between the two parties involved, they establish their own conditions. To do this, the lender and the borrower usually write and sign a credit agreement which sets the conditions relating to the loan: repayment condition and duration, monthly payments, interest rate and total amount of the loan. It is a formality to justify their commitment. In case of dispute or disagreement, the document will serve as proof. This step is crucial, even for close people, because a loan, even without a pay slip, is a commitment to repay. Signing an acknowledgment of debt is an essential precaution for the lender who guarantees the repayment of his money by the borrower. This document therefore takes the form of a contract. Some people do without this stage, mostly between two members of the same family or two longtime friends. However, a credit without certificate can be a source of conflict.
- What are the advantages of credit between individuals?
- Can we lend money at zero rate to an individual?
- What can you buy with a loan between individuals?
- How does the loan work between individuals?
- How to declare a loan between individuals?
- What about the repurchase of credit between individuals?
What are the advantages of credit between individuals?
The loan between individuals is most often associated with a quick and easy credit. Compared to other types of credit, the procedures have been streamlined and simplified so that everyone can access them with ease. Depending on the borrower, the process of applying for credit between individuals can be reduced to the signing of a simple acknowledgment of debt. In this case, there must still be mutual trust between the two parties.
You should also know that the terms of a credit between individuals are freely defined between the lender and the borrower. Without bank intermediation and the various administrative fees, the total cost of the loan between individuals is, in most cases, lower than the loans granted by banking organizations. And even if you go through an accredited body you can still hope to get a good deal by negotiating for the best rate.
Another advantage of individual-to-individual credit also remains the fact that it is a credit accessible to everyone, even to people registered with the Bank of United States or in a situation of banking prohibition. As long as the borrower is solvent, he can turn to this type of financing in case of urgent need of money.
Can we lend money at zero rate to an individual?
If you are looking for a zero rate credit, that is to say free of interest rate. Personal credit between individuals can be a very good solution. In the context of a type of loan of money between two individuals, you should know that the interest rate depends on the agreement between the borrower and the lender. It should not just exceed the thresholds decreed by law which is 20.35% for a credit of 3000 us dollars or less. If you borrow from a relative or an acquaintance, depending on your relationship and the amount of your loan, it is quite possible to obtain an interest-free credit to repay within the timeframe agreed for this purpose.
What can you buy with a loan between individuals?
The loan between individual can be assimilated to a credit without proof of use in the sense that you can use the amount borrowed freely.
- In case of need for cash to face an unforeseen event: Since everyone is subject to the vagaries of life and can find themselves in a difficult financial situation overnight. The loan between individuals can help you cope and go up the slope quickly
- finance the renovation of your house: eager to undertake renovation work? You can have the sum you need to finance these projects without having to make a personal contribution.
- Financing your business: with the advent of crowdfunding or crowdfunding, young entrepreneurs can now have access to financing more suited to their business needs.
- buy a new car: need a new car to get to work? It could be an urgent purchase especially if your workplace is far away. The steps necessary to obtain an auto loan can take time and the rates do not always sound advantageous, which is why personal credit may be more suitable.
How does the loan work between individuals?
Credit between individuals is increasingly successful. It is a less restrictive alternative solution to obtain financing. It is still necessary to know certain rules as well as the mode of operation in order to obtain this type of loan.
The loan between individuals is particularly interesting in its simplicity. Indeed, the conditions for obtaining it are not as strict as for those of a bank. Likewise, the necessary supporting documents are not the same. In the case of a loan to a family, this is not essential.
Moreover, this type of loan is a good alternative solution in case of emergency need. That said, the absence of a strict procedure allows the money to be obtained in the shortest possible time. In addition, the terms of the repayment modality are subject to the agreement of both parties. There are no fixed rules.
Finally, there are several accredited sites on the Internet. This allows you to have the choice and find the most suitable offer. Moreover, if there is no urgency, it is advisable to compare several offers before making a decision. Again, being able to do everything online makes the procedures even faster.
How to declare a loan between individuals?
The declaration of a loan between individuals is mandatory from a certain amount. In principle, it is compulsory for all loans between individuals for security measures, and this, since 1998. It is still necessary to know the procedures for declaring this type of loan.
In general, any loan that exceeds US $ 760 must be declared particularly by the borrower. This statement is almost inescapable, as it holds true even for split loans. As long as the accumulation exceeds this sum, it must be declared in the same way as the income statement.
On the other hand, the lender is not bound by this declaration if the loan concerns only one person. Otherwise, that is, if the lender has granted a loan to several people, this must be declared. All the more so if the total amount exceeds 760 us dollars. This is a form to be completed including 2062.
It is the same for interest. Note that this rate must be within the limit of the rate of wear. The lender is required to declare the interest received by the loan in question at a tax office. Any amount, the loan between individuals must be declared. It is almost impossible to hijack this statement.
What about the repurchase of credit between individuals?
Also called credit without a bank, credit between individuals has some similarities to conventional loans. Particularly in terms of loan redemptions. It is a solution that attracts more and more customers by its simplicity. It is still necessary to know certain conditions to respect.
In principle, a credit redemption consists of grouping several loans into one. This allows for a longer repayment period. In addition, the monthly payments are reduced thereafter which offers a more substantial remainder to live. This solution is also recommended to reduce the interest rate.
In the case of a loan between individuals, the principle is the same. Except that given the absence of the intervention of a bank or other establishment, this redemption will be done by an individual. Especially since the time to obtain this type of loan is relatively short. In addition, this credit is exempt from administration fees.
In the majority of cases, a loan between individuals concerns loans for current expenses or an event or even purchases. It is rare to take out and buy back a mortgage. Especially since there is a ceiling amount to be respected with this type of loan just like conventional bank loans.
Three recurring questions
How does a loan between reliable individuals work?
A personal loan between individuals must always be recorded by signing an acknowledgment of debt or a credit agreement which must mention the total amount of the loan, the duration of repayment of the credit, the frequency of monthly repayments, as well as any interest rates, if any. In the absence of this evidence, if there is any dispute, the courts may consider that the money was donated.
How to avoid loan scams between individuals?
Many money lending scams between individuals exist on the internet, especially on forums and blogs. We recognize them by their seductive offer, but above all by the fact that they ask for a payment of administrative fees in advance. A serious lender is above all an honest lender who respects the law which stipulates that no payment of any kind whatsoever can be demanded from an individual before obtaining a loan of money.
How to make a loan between individuals?
The easiest solution to find money to borrow certainly remains with relatives (friends or families) on condition of course to be a person of trust and to be solvent. If you are looking for a serious and fast loan, you can also turn to a loan site between individuals such as Younited Credit or to a crowdfunding or crowdfunding platform.
The elements to take into account for a loan application between private individuals
Personal credit is a form of borrowing that does not require many conditions. However, even being an easy credit, there are certain elements to take into account in obtaining it. Thus if the credit to be borrowed is greater than € 750, the applicant must notify the tax authorities. Then an acknowledgment of debt must absolutely be drawn up for sums exceeding 1500 €. The purpose of such an obligation is to avoid any possible conflict between the parties. But even if the sum is less than this limit, it is always advisable for both parties to write a written document for greater security.
In addition, for this type of loan, it is quite possible to be granted money by setting up a zero-rate loan. So this is fast credit that looks more at the lender trying to be of service than getting financial benefits. Whether you are a borrower or a lender, you should also understand that specialized platforms charge an interest rate and fees. These are certainly less expensive than those offered by the bank but they really exist. Finally, to fully benefit from all the advantages of this loan, it is strongly recommended to use a bailiff. The latter will be able to assist you in your appeal. Once the contract is concluded, the establishment of recognition will become mandatory. The latter's role is to protect the lender by allowing him to acquire his debts if the borrower is in bad faith.