Yes. Charging interest on a loan is important because it sets up the agreement as something other than a gift or a handout. Interest can also make up for differences in inflation between the start and the end of the loan. The interest rate for a personal loan to give should be determined by the […]
Making a loan agreement just means that there are safety nets for both parties involved in the loan. This does not mean that there is no trust, but rather, a clear definition and set of expectations around the loan that you are both happy with and are willing to follow. This shows that you value […]
Your loan agreement should include how much the loan is for, the interest rate, what the money is to be used for, clear repayment terms, what will happen if you fall behind or miss a payment (such as a late fee), and signatures from both parties.
A breakdown in a personal relationship when you have financial commitments can be tricky to navigate. You can get free legal advice if something goes wrong, otherwise try to maintain a civil relationship and deal with your mutual obligations. Using Credi, or some other loan documentation service will protect both of you if the relationship […]
If the loan is formally agreed upon in writing with a plan to repay it by the borrower, it does not interfere with any taxation. However, if a loan is written off, it counts as a ‘gift’ on behalf of the lender, which does have tax implications. For the borrower, if the loan is forgiven, […]
The main purpose of a loan contract is to define what the parties involved are agreeing to, what responsibilities each party has and for how long the agreement will last.
Treat a personal loan from a friend or family member like you would any other loan. You must be prepared to meet all of your obligations on time until the loan is paid in full. A private loan just means a loan from someone other than a bank or lending institution, and the agreement is […]
Most loan contracts define clearly how the proceeds will be used. There is no distinction made in law as to the type of loan made for a new home, a car, how to pay off new or old debt, or how binding the terms are. The signed loan contract is proof that the borrower and […]
While a loan agreement between family and friends may not be necessarily a legal document, it does protect both sides if the matter goes to court.
Formalising a loan agreement just means putting in writing something that may have been talked about. This is to clearly identify the relevant interest rates, loan terms and conditions.