The figure of private lenders has existed practically since money has existed, but with the appearance of banks, their presence in the market was reduced. And now we find that this way of financing is becoming very popular again because of how difficult it is for some people to get a bank to lend them money.
How Does A Loan Between Individuals Work?
The operation is very similar to when the operation occurs between a private individual and a bank. Both parties sign a loan agreement between individuals in which the creditor agrees to leave the other party a certain amount of money and the debtor agrees to return that amount in the agreed time and manner , as well as the agreed interest.
Types Of Loans Between Individuals
Loans Between Family Or Friends
We have already talked about the family loan before . As a summary, it is enough to point out that it is convenient to record the agreement in writing, not only for greater security of those involved, also so that the Treasury does not consider that it is a donation and intends to collect taxes for it.
Person-to-person loans are carried out today mainly through crowdlending platforms . In this case, the lender is more of a professional investor who lends his money to someone who is starting a business and needs financing.
In these cases, there are usually several private lenders investing in the same project, making it easier for the entrepreneur to get the amount he needs. The great advantage of this type of loan is that guarantees are not necessary .
The Loan Agreement Between Individuals
If the operation is done through a crowdlending platform, this will be the one in charge of the documentation. In the event that it is directly an agreement between two individuals, it is advisable to record what was agreed in writing.
The contract should contain the full identity of the parties , the address of the same notification purposes, the amount has been paid , the interest that apply (you may agree on an interest free loan), the time and method of repayment and all those aspects that are considered relevant.
The date of conclusion of the contract must be stated and it is advisable for all those involved to sign on all the pages, leaving a copy for the creditor and another for the debtor.
Are Taxes Paid?
This is a tax liability and exemption case . That is, you have to file the Tax on Patrimonial Transmissions and Documented Legal Acts so that the Treasury has proof that it is a loan, but you do not have to pay anything for taxes.
In these cases the contract can be made in a private document , it is not necessary to go to the Notary Public, so it is normal that there are no associated expenses. However, if you work through a crowdlending platform, it is normal for it to charge a commission.
As you can see, loans between individuals are a good financing alternative, but our recommendation is that, as far as possible, you avoid borrowing money.