Recommendations on private loans between individuals

Almost all of us know about private loans between individuals, they have still been in our country for a short time, since banks began to deny credit to many individuals, they have had to look for other sources of financing.

Let’s see what private loans between individuals consist of. The process is quite simple, the borrower must indicate the amount of money he needs, the reason why he will need that amount, an important aspect to formalize the agreement better, the maximum time he can have to return the money and the interest rate that I would be willing to pay. If there is something in which the private loans between individuals stand out, in opposition to the traditional financial products of the banking entities, it is that there are forms of financing that have a small altruistic component. But you can also make a private loan to individuals, usually it is going to be an investor who grants money to the borrower to carry out the project or business that he has in mind.

Obviously, there are some legal and fiscal obligations, as a general rule, when a loan is made between individuals to buy a home, which is usually called family loans. There are no distinctions with loans between individuals, since the two cases have in common that the operation is carried out without the intervention of the credit institution. In family or private loans, these are characterized because they are subject to legal and fiscal obligations, for example the payment of taxes that are the following: The heritage transmissions and documented legal acts; more let’s say that each autonomous community has a different regulation and in general, they are the ones that have competences as far as the management and settlement of these taxes are concerned, it is convenient to keep in mind that the loans will be free of taxes, regardless of the form in which they are carried out, since the taxpayers will be obliged to present those explanatory documents of the taxable circumstances as far as the law is concerned, and in the case that these exist, a declaration of the deadlines and in what form establishes regulations.

The income tax; the loans between individuals that are destined to buy habitual houses do not have in the IRPF different treatment to the one that could correspond to those granted by credit entities. For that reason, it does not matter if the loan is granted by a family member, a friend or a credit institution, since this does not mean altering the character that implies outside financing, which incorporates all this. It would occur as an acquisition cost of a habitual residence, in those cases in which it is purchased before the end of the year, if there are no fiscal changes again.

Some things are recommended to carry out a correct private loan. In the first place, the agreement must be formalized so that unwanted tax and legal consequences are avoided. The verbal agreement is not advisable, therefore, it is convenient to sign a public deed before a notary or through a private contract, agreed between both parties. It must be borne in mind that the passage through the notary involves costs and payments.

These documents must include all the information and data of lender and borrower, what interest rates the operation has and the amount or amount of money lent, in addition to the period in which it must be repaid. The last recommendation, refers to that you have to be aware of all taxes. Since if you observe that the loan is a gift, it is more likely that you will be forced to pay a donation tax, that means that the amounts corresponding to the loan can not be deducted in the income statement.