A payday loan can mean the perfect interim financing for you today if you don’t want to do without a cheap offer (home purchase, car financing). Cheap banks are currently available for loans.
Alternatively, you could still think about granting credit among friends. There could be private reasons that preclude a bank loan. Basically, it is enough if lenders and borrowers agree. There are no formal requirements or even the obligation to conclude a loan contract with a notary. However, you should also note a few important points when granting credit among friends. This saves you later trouble and disappointment.
Written loan agreement
Always draw up a loan agreement in writing. Otherwise, as the lender, you will be left behind if there is a dispute. You would have to prove that you gave the money as a loan and not as a gift. The negotiated interest rate should also have been set in writing.
Write down the current loan amount and the payment date. If both parties agree that the loan granted should be interest -free, then formulate this agreement. If a loan interest has been agreed, the following wording might be appropriate:
- The loan is subject to annual interest from (date) with percent (interest rate).
- In addition, note that the interest is payable by the third working day of a calendar quarter for the previous calendar quarter.
Of course, other agreements are also possible and can be agreed in writing.
If you do not record the time of repayment or possible installment payments, the legal regulation applies.
This means that the loan can be terminated at any time with a three-month period. When the deadline has passed, the money must be paid. If the borrower does not pay, the lender can initiate a payment order via the district court. And if the debtor does not contradict this, he can apply for an enforcement order. He can also take legal action immediately.
The contracting parties can freely determine the amount of the interest. However, if it exceeds double what banks usually ask for, it is usury. This agreement is invalid and no interest is due. It is easier for you as a lender with regard to security and taxation if your debtor offers security and this is noted in the contract.